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Wall Street kicked off 2022 on a high note with Dow Jones hitting record highs for the first two consecutive sessions of the year. The S&P 500 also hit a new milestone of 4,800 before retreating. While the technology sector has taken a beating, cyclical sectors are outperforming.

In fact, these ETFs — AlphaMark Actively Managed Small Cap ETF (SMCP - Free Report), SPDR S&P Oil & Gas Equipment & Services ETF (XES - Free Report), North Shore Global Uranium Mining ETF (URNM - Free Report), First Trust NASDAQ Global Auto ETF (CARZ - Free Report) and First Trust Nasdaq Bank ETF (FTXO - Free Report) — are the biggest beneficiaries to start the New Year.

The gains came despite the raging Omicron cases across the globe and inflationary fears. The 10-year Treasury yields soared as high as 1.71% but remained low on historical basis.

Higher yields indicate investors’ optimism in the economy that has encouraged a flight to cyclical sectors like energy, financials, materials, and industrials, rotating out of the high-growth sectors like technology. As the cyclical sectors are tied to economic activities, these outperform when economic growth improves. Further, small-cap stocks are also performing well given that these are more domestically tied and generate most of their revenues from the domestic market.

ETFs in Focus

We have profiled the above-mentioned ETFs in detail below:

AlphaMark Actively Managed Small Cap ETF (SMCP) – Up 18%

AlphaMark Actively Managed Small Cap ETF is actively managed and invests primarily in ETFs that offers exposure to equity securities of small-cap companies listed on a U.S. or international exchange. It holds 7 ETFs in its basket and charges 1.22% in ananul fees.

AlphaMark Actively Managed Small Cap ETF has amassed $26.1 million in its asset base.

SPDR S&P Oil & Gas Equipment & Services ETF (XES) – Up 11.9%

SPDR S&P Oil & Gas Equipment & Services ETF targets the oil and gas equipment and services segment of the energy sector. It follows the S&P Oil & Gas Equipment & Services Select Industry Index, holding 29 stocks in its basket.

SPDR S&P Oil & Gas Equipment & Services ETF has been able to manage $124.3 million in its asset base and charges 35 bps in fees per year from investors. It trades in an average dialy volume of 60,000 shares (read: Energy Emerges Best Sector of the Week: 5 ETFs That Topped).

North Shore Global Uranium Mining ETF (URNM) – Up 10%

North Shore Global Uranium Mining ETF provides exposure to companies involved in the mining, exploration, development and production of uranium, as well as companies that hold physical uranium or other non-mining assets. It follows the North Shore Global Uranium Mining Index and charges investors 85 bps in annual fee.

North Shore Global Uranium Mining ETF holds 35 stocks in its basket and has accumulated $693.2 million in its asset base. It trades in a good volume of 352,000 shares per day on average.

First Trust NASDAQ Global Auto ETF (CARZ) – Up 6.9%

First Trust NASDAQ Global Auto ETF offers a pure-play global exposure to 33 auto stocks by tracking the Nasdaq Global Auto Index. It has a moderate concentration across components as each of these make up for no more than 9% share.

First Trust NASDAQ Global Auto ETF has $74.7 million in AUM and trades in a small average daily trading volume of about 18,000 shares. The product charges 70 bps in fees per year and has a Zacks ETF Rank #3 (Hold) with a High risk outlook.

First Trust Nasdaq Bank ETF (FTXO) – Up 6.4%

First Trust Nasdaq Bank ETF follows the Nasdaq US Smart Banks Index, which measures the performance of U.S. companies within the banking industry. It holds 28 securities in its basket and charges 60 bps in annual fees.

First Trust Nasdaq Bank ETF has AUM of $277.4 million and trades in volume of 76,000 per share on average. It has a Zacks ETF Rank #3 (Hold).