5 Sector ETFs That Survived Last Week's Turmoil

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Wall Street saw tumultuous trading last week with the Dow Jones and the S&P 500 dropping 1.1% and 1.4%, respectively. The tech-heavy Nasdaq Composite Index declined 2.3% last week. The renewed inflation fears have sparked a huge sell-off in the front-loaded week.

The latest inflation data shows the largest annual increase since 2008. The Consumer Price Index spiked 4.2% from a year ago and 0.8% from the prior month to the highest level in 13 years. The Producer Price Index in April expanded 6.2% from the year-ago month, representing its biggest expansion in a decade.

The spike in inflation has made investors jittery, compelling them to dump the growth stocks in particular. This is because rising prices tend to squeeze margins and erode corporate profits for the growth companies, which usually have higher valuations. If inflation remains high for a sustained period of time, it could trigger earlier-than-expected tightening policies from the Federal Reserve though the central bank views inflation as temporary.

Additionally, the rounds of latest data have added to the chaos. Consumer confidence in early May tumbled with the preliminary reading for the University of Michigan Index of Consumer Sentiment dipping 6.2% from the month ago to 82.8 for May. U.S. retail sales were flat in April after jumping nearly 11% in March. Though U.S. industrial production rose 0.7% in April, it is down from a sharp increase of 2.4% in March.

However, the stocks rebounded later in the week as investors jumped in to cash the beaten down prices and snapped up the stocks that would benefit from an economic recovery.

Against such a backdrop, we have highlighted five sector ETFs that performed well last week and survived the broad market rout.

JPMorgan Alerian MLP Index ETN (AMJ - Free Report) – Up 4.2%

MLPs gained popularity on President Joe Biden’s capital gain tax hike plan as they offer huge capital tax benefits. While most MLPs gained, AMJ topped the list. This fund provides investors a way to gain exposure to midstream energy MLPs. With AUM of $2.2 billion, the note charges 85 bps in annual fees and trades in an average daily volume of 607,000 shares.

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