Top And Flop Zones At Half-Way Q3 & Their ETFs

Global stocks were off to a solid start in the third quarter buoyed by a roaring American stock market. 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, a booming technology sector, the rise in mergers and acquisitions, better-than-expected earnings and a weak dollar also added to the strength.

In particular, the Nasdaq Composite Index hit new record highs last month to cross the 11,000 milestone. The Nasdaq's march from 10,000 to 11,000 has been the fastest ever in 20 years. The benchmark hit 10,000 on Jun 10 and took 40 trading days to climb to the 1,000 point. Meanwhile, the S&P 500 joined the Nasdaq to hit all-time highs this week. The benchmark saw a sharp rebound from the trough seen in March to a new peak in just 126 trading days, marking the fastest-ever recovery from a bear market in the history of the index.

In the commodity world, precious metals showed their strength though they lost their attractiveness in recent weeks. Gold touched an all-time high of more than $2,000 per ounce while silver jumped to the highest level in seven years. Massive liquidity injections by central banks across the globe, hopes of further stimulus and weakness in the U.S. dollar against major global currencies supported the price of metals.

Given this, we have highlighted the best and worst performing zones and their ETFs halfway through the third quarter:

Best Zones

Silver

Silver has been outperforming gold this quarter as increase in investment and industrial demand proved advantageous. Additionally, the global push for green energy, growing demand in areas like 5G, and new sources of demand for sensors used in IoT and OLED lighting will continue to boost the requirement of silver. Silver is largely used for manufacturing of solar panels and electronics.

While many silver ETFs have been surging, Aberdeen Standard Physical Silver Shares ETF (SIVR - Free Reportis leading with 46.7%. This fund has AUM of $879.9 million and trades in moderate volume of around 990,000 shares per day on average. It tracks the performance of the price of silver less the Trust expenses. Expense ratio is 0.30%. SIVR has a Zacks ETF Rank #3 (Hold) with a High risk outlook.

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