4 Sector ETFs Surviving The Market Rout In 2018

After a roaring start to 2018, U.S. stocks faltered on higher interest rates and escalation in U.S.-China tit-for-tat tariff dispute. The decline aggravated in the fourth quarter given that a combination of other factors including rounds of tech sell-off, geopolitical tensions, political malaise in Europe, slowdown in Japan and emerging markets, threats of global slowdown, and flattening of the U.S. yield curve created tensions in the equity world.

Oil has slipped into the bear territory leading to further caution among investors. Additionally, the lower-than-expected Fed’s dovish view for the next year in the latest FOMC meeting have also made investors jittery. The pessimism spreading across Wall Street has sent the S&P 500 and Nasdaq to the bear territory.

With this slump, the S&P 500 is on track for its first annual loss in a decade while the Dow Jones is expected to log its worst year since 2008.

While most of the sectors are in red this year, a few ETFs are easily surviving the market rout. We have highlighted them in detail below as these could be better plays heading into the New Year, should the trends prevail.

Invesco Dynamic Software ETF (PSJ - Free Report) – Up 7.6%

Though the technology sector has been on a tumultuous ride in recent months, the rapid adoption of cutting-edge technology and holiday spirit was unable to take sheen away from ETFs that employ some unique/smart approach or have less exposure to the big players. PSJ is one of them that offer exposure to companies engaged in the research, design, production or distribution of products or processes related to software applications and systems and information-based services.

With AUM of $232.1 million, this ETF provides exposure to 30 software segments of the broader U.S. technology space with each accounting less than 5.3% share. It charges 63 bps in annual fees and trades in average daily volume of 46,000 shares. The product has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

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