Top ETF Stories Of Fourth Quarter 2020

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The year 2020 as a whole could easily be attributed to the COVID-19 outbreak, the resultant lockdown and economic sufferings, but some relief came in the fourth quarter. October 2020, however, saw some solid stock market gyrations thanks to failed stimulus talks, subdued tech earnings and rising coronavirus cases on the global front.

Back-to-back positive vaccine updates and Joe Biden’s win with a divided Congress boosted markets in November. The winning spree continued in December with Trump’s signing of the second round of a virus stimulus deal.

Overall, Wall Street is hovering at record highs with global markets too moving along. The S&P 500, the Dow Jones and the Nasdaq Composite added about 13.2%, 11.9% and 17.3%, respectively, in the past three months (as of Dec 28, 2020).

Against this backdrop, below we highlight a few top ETF stories of the fourth quarter.

Vaccine News

The month of November started delivering sweet surprises to investors in the form of back-to-back vaccine news. Pfizer Inc. (PFE) and BioNTech SE (BNTX) first came up with an encouraging update on their coronavirus vaccine candidate, BNT162b2, which reflects an efficacy rate of 95%. Moderna (MRNA) also said that its vaccine was more than 94% effective in preventing the virus. Then, the third good news came from AstraZeneca (AZN) which said that its vaccine showed 70% effectiveness on average. At the current level, some countries even started applying those vaccines on an emergency basis.

No wonder, economically cyclical ETFs and sectors, that were marred so far this year, got charged up. iShares U.S. Oil Equipment & Services ETF (IEZ) , SPDR S&P Bank ETF (KBE) and Invesco S&P 500 High Beta ETF (SPHB) and SPDR S&P Retail ETF (XRT) were some of the ETFs that were immensely benefited.

Small-Caps Made a Solid Comeback

The Russell 2000 Index outperformed the bigger equity gauges by a wide margin as the pint-sized stocks ruled in Q4. The small-capitalization focused iShares Russell 2000 ETF (IWM) added 35.2% in the past three months, breezing past three other big equity gauges.

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