5 ETFs Shining Bright Amid September Selling

After peaking in early September, the major U.S. bourses witnessed sharp sell-offs. The S&P 500 has tumbled 7.5% so far this month while Dow Jones has declined 5.8%. The tech-heavy Nasdaq Composite Index is on the verge of the correction territory from the latest peak, having plunged 9.7%.

Notably, the S&P 500 is on track for its steepest decline in September since 2002, when it crumbled 11% in the month due to growing fears of inflating Internet-related stocks, according to Dow Jones Market Data.

The combination of lofty valuation, lack of additional fiscal stimulus package, election uncertainty and rising U.S.-China tensions weighed on investors’ sentiment. Resurgence in COVID-19 cases in the United States and Europe has sparked concerns over the global economic recovery and lockdown measures. Most parts of Europe have already re-imposed restriction measures.  

Further, a report, which claimed that global banks moved illicit funds over the past two decades despite warnings from U.S. officials contributed to the market decline. A new investigation by BuzzFeed and the International Consortium of Investigative Journalists found that banks’ internal compliance officers flagged a total of more than $2 trillion in transactions between 1999 and 2017 as possible money laundering or other criminal activity.

Amid the uncertainties, a few sectors have been surviving the market turmoil. We have highlighted five of them that have risen in the past month and could be compelling picks in the weeks ahead.

Renaissance IPO ETF (IPO - Free Report) – Up 7.2%

This fund provides exposure to the largest and most-liquid, newly listed companies by tracking the Renaissance IPO Index. It currently holds 47 stocks in its basket with technology taking the top sector accounting for 46.1% share while healthcare and consumer discretionary round off the next two spots with double-digit allocations each. The fund has amassed $192.3 million in its asset base while it trades in a moderate volume of about 138,000 shares, probably implying additional cost beyond the expense ratio of 0.60%.

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