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Wall Street has been on a tumultuous ride over the past month. While recession fears keep investors on edge, bets over Fed rate cuts in September fuel optimism in the stock market. Additionally, the second-quarter earnings season produced an overall stable picture of corporate profitability but concerns have emerged about the outlook, as estimates for the current period have weakened more than the last two periods.

Total second-quarter earnings for 473 S&P 500 members, or 94.6% of the index’s total membership are up 8.0% from the same period last year on 5.0% higher revenues, with 79.7% beating EPS estimates and 59.8% beating revenue estimates. Except for the revenue beat percentage, which at 59.8% is near the lowest for this group of 473 index members over the preceding 20-quarter period, all the other performance metrics are tracking better relative to the recent periods.  

Given this, most equity ETFs have impressed with their performance and generated handsome returns over the trailing one-month period. Below are four ETFs from different sectors that have gained from strong earnings despite the market volatility. We have provided a chart for their performances over the past month and compared them with the broader market fund (SPY) and the broader sector. 

iShares U.S. Medical Devices ETF (IHI - Free Report)

iShares U.S. Medical Devices ETF, which provides exposure to U.S. companies that manufacture and distribute medical devices, has gained 6.7% over the past month. Total earnings for the healthcare sector’s total market capitalization are up 19.1% on 8.3% higher revenues, with 86% of the companies beating on earnings and 75.4% exceeding the top-line estimates. Notably, the sector is the largest contributor to the S&P 500’s earnings growth. 

Further, the ETF got some boost from the sector’s non-cyclical nature, providing a cushion to the portfolio amid volatile market conditions. IHI has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook.

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First Trust S-Network E-Commerce ETF (ISHP - Free Report)

First Trust S-Network E-Commerce ETF has risen 5.7% over the past month. It offers exposure to 61 companies operating in the following business segments — Content Navigation, Online Retail, Online Marketplace and E-Commerce Infrastructure. ISHP falls in the retail category. The retail sector is the second largest contributor to the S&P 500’s earnings growth. Total Q2 earnings from the sector are up 17.3% year over year on 4.8% higher revenues.

First Trust S-Network E-Commerce ETF has a Zacks ETF Rank #3 (Hold).

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iShares U.S. Insurance ETF (IAK - Free Report)

iShares U.S. Insurance ETF offers exposure to U.S. companies that provide life, property and casualty and full-line insurance. It has gained 5.4% in a month and has a Zacks ETF Rank #2 with a Medium risk outlook.

Earnings of the financial sector are up 10.5% from the same period last year on 5.8% higher revenues, with 88.8% of the companies topping EPS and 66.3% exceeding revenue estimates. Notably, the earnings beat ratio is the second highest this earnings season. Life insurance companies came up with a 100% earnings beat, followed by an 80% beat each for property and casualty and accident and health insurers. 
 

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Invesco DWA Technology Momentum ETF (PTF - Free Report) ) 

The technology sector saw a huge sell-off on fading AI enthusiasm amid the disappointing results from four of the “Magnificent 7” — Tesla (TSLA), Alphabet (GOOGL), Microsoft (MSFT), and Amazon (AMZN). Still, PTF gained 7.4% as it does not have large exposure to these stocks and focuses on tech companies that show relative strength (momentum). Invesco DWA Technology Momentum ETF has a Zacks ETF Rank #1 (Strong Buy).

Total earnings for the technology sector are up 15.5% from the same period last year on 7.5% higher revenues, with 84.1% beating EPS estimates and 72.5% beating revenue estimates. While the earnings and revenue beat percentages are tracking below historical averages, growth rates are comparable to the preceding period.  

Image Source: Zacks Investment Research

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