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The stock market has been witnessing a slowdown in recent weeks due to a round of economic data points, indicating a longer-than-expected Fed rate hike plan. However, the Fed minutes released yesterday infused some optimism once again as almost all officials backed a slower pace of interest rate increases.

Based on minutes, the ETFs, which lost the most last week and are the major beneficiaries of a slower rate hike, are expected to resume the rally in the weeks ahead. Some of these include VanEck Vectors Digital Transformation ETF (DAPP - Free Report), Valkyrie Bitcoin Miners ETF (WGMI - Free Report), ProShares Online Retail ETF (ONLN - Free Report), First Trust Nasdaq Clean Edge Green Energy Index Fund (QCLN - Free Report) and Roundhill MEME ETF (MEME - Free Report).

Per the minutes, the interest rates will continue moving higher amid the ongoing inflation concerns but at a slower pace, which the Fed officials think is the best way to manage the risks of raising rates. At the same time, they were also concerned about stopping or slowing their inflation-fighting campaign too soon. The central bank raised interest rates by 25 bps last month after hiking 475 bps last year the fastest hike since the 1980s.

The bouts of the latest data suggest stronger economic activity and slower progress on reducing inflation. This has dulled the prospect of the Fed’s slower rate hike path. Hiring surprisingly surged with the economy adding a solid 517,000 jobs in January. The unemployment rate fell from 3.5% to 3.4%, the lowest since 1969.

Inflation jumped more than expected at the start of 2023, but the annual increase was the lowest since October 2021. The consumer price index rose 0.5% in January following a 0.1% increase in December. It climbed 6.4% year over year, almost steady with a 6.5% increase in December but down from a peak of 9.1% in June.

The business activity unexpectedly rebounded in February, reaching its highest level in eight months, while U.S. builder confidence has risen for the second consecutive month in February to the highest level since September 2022. Meanwhile, Americans have been regaining confidence in the U.S. economy, with consumer sentiment in early February jumping to its highest level in 13 months, per the latest University of Michigan's consumer survey.

Further, economic growth has rebounded in Europe and activity in China has improved after reopening, easing worries of a global recession this year.

We have detailed five of the ETFs below:
 

VanEck Vectors Digital Transformation ETF – Down 11.1%

VanEck Vectors Digital Transformation ETF aims to offer exposure to companies that are at the forefront of the digital asset transformation, such as digital asset exchanges, payment gateways, digital asset mining operations, software services, equipment and technology or services to the digital asset operations, digital asset infrastructure businesses or companies facilitating commerce with the use of digital assets. VanEck Vectors Digital Transformation ETF tracks the MVIS Global Digital Assets Equity Index and holds 20 securities in its basket.

VanEck Vectors Digital Transformation ETF charges 50 bps in annual fees and trades in an average daily volume of 110,000. DAPP has accumulated $31.2 million in its asset base.
 

Valkyrie Bitcoin Miners ETF – Down 9.8%

Valkyrie Bitcoin Miners ETF is an actively managed ETF that will invest at least 80% of its net assets (plus borrowings for investment purposes) in securities of companies that derive at least 50% of their revenues or profits from bitcoin mining operations and/or from providing specialized chips, hardware, and software or other services to companies engaged in bitcoin mining. Valkyrie Bitcoin Miners ETF holds 25 stocks in its basket with a double-digit concentration on the top firm.

Valkyrie Bitcoin Miners ETF has amassed $5.9 million in its asset base while trading in an average daily volume of 45,000 shares. It charges 75 bps in annual fees.
 

ProShares Online Retail ETF – Down 8.9%

ProShares Online Retail ETF offers exposure to companies that principally sell online or through other non-store channels and then zeros in on the companies that reshape the retail space. It tracks the ProShares Online Retail Index, holding 25 stocks in its basket. ONLN is highly concentrated on the top two firms, while the other firms hold no more than 6.7% of the assets. American firms make up 65.8% of the portfolio, while Chinese firms account for 25% share.

ProShares Online Retail ETF has accumulated $134.2 million in its asset base and charges 58 bps in annual fees. ONLN trades in an average daily volume of 97,000 shares.
 

First Trust Nasdaq Clean Edge Green Energy Index Fund – Down 8.6%

First Trust Nasdaq Clean Edge Green Energy Index Fund offers exposure to companies engaged in the manufacturing, development, distribution, and installation of emerging clean-energy technologies, including solar photovoltaics, wind power, advanced batteries, fuel cells, and electric vehicles. It tracks the Nasdaq Clean Edge Green Energy Index and holds 61 stocks in its basket.

First Trust Nasdaq Clean Edge Green Energy Index Fund manages assets worth $1.8 billion and charges 58 bps in fees per year. The product trades in an average daily volume of 204,000 shares and has a Zacks ETF Rank #2 (Buy) with a High-risk outlook.
 

Roundhill MEME ETF – Down 8.3%

Roundhill MEME ETF is the first ETF globally explicitly designed to track the performance of meme stocks. It follows the Solactive Roundhill Meme Stock Index, which consists of equal-weighted U.S.-listed equity securities that exhibit a combination of elevated social media activity and high short interest. Roundhill MEME ETF holds 25 stocks in its basket, with none making up for more than 5% share.

Roundhill MEME ETF has gathered $1 million in its AUM and charges 69 bps in annual fees. It trades in a volume of 5,000 shares a day on average.

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