S&P 500 Hits New Record Highs: Top-Ranked ETF Winners

The S&P 500 hit a new record high at the close for the first time since the COVID-19 outbreak. The sharp rebound from the trough seen in March to a new peak represents 126 trading days and marks the fastest-ever recovery from a bear market in the history of the index. The benchmark is now up 4.9% this year.

The combination of unprecedented fiscal and monetary stimulus in response to the pandemic, hopes of a swift economic rebound and high chances of a successful coronavirus vaccine drove the stocks higher. Additionally, the U.S. economy is steadily recovering and the loss suffered due to the pandemic is less than feared. "From a 34% bear market to new highs, 2020 is record-breaking and heartbreaking all at the same time," per Ryan Detrick, chief investment strategist at LPL Financial.

Further, a rise in mergers and acquisitions and a weak dollar led to a spike in the stock market. The recent dollar weakness is acting as a huge tailwind for the mega-cap companies, which derive most of their revenues from international markets. This is because a weak dollar has made dollar-denominated assets cheap for foreign investors, making U.S. multinationals more competitive and leading to increased profits. The ascent in stocks came despite the lingering uncertainty over the economic and political outlook.

While there are winners in many corners of the space, several ETFs easily crushed the market by wide margins in the year-to-date timeframe and carry a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy). Below, we have presented a bunch of top-performing ETFs that are likely to continue outperforming, should the trends prevail.

Invesco Solar ETF (TAN - Free Report) – Up 70%

This ETF offers global exposure to the solar industry by tracking the MAC Global Solar Energy Index. It holds 27 stocks in the basket with American firms dominating half of the portfolio, followed by China (22.2%) and Spain (7.4%). The product has amassed $1.1 billion in its asset base and trades in a solid volume of around 538,000 shares a day. It charges investors 71 bps in fees per year and has a Zacks ETF Rank #2 with a High risk outlook.

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