Top-Ranked ETF Winners In Dow's Longest Rally In 24 Years

The progress in U.S.-China trade deal has bolstered optimism in Wall Street since the start of the year. Hopes of a deal between the two largest economies have pushed the Dow Jones to above 26,000 for the first time since Nov 9. In fact, the index has moved up for the ninth consecutive week, marking the longest rally since May 1995.

Meanwhile, the tech-heavy Nasdaq also notched its ninth consecutive week of gains, marking its longest winning streak since May 2009. The Dow Jones has climbed more than 11% so far this year and the Nasdaq is up 9%.

In the latest sign of progress in bilateral trade talks, Donald Trump postponed the date for boosting tariffs on Chinese imports. The Federal Reserve also played an important role in driving market sentiments. The central bank said that it will be patient in raising rates, citing mounting risks to the U.S. economy, including slowdown in Chinese and European economies and waning stimulus from the 2018 tax cuts.

While there are winners in many corners of the space, some ETFs have crushed the Dow Jones by wide margins in three months. Below we have presented a bunch of those ETFs that are likely to continue outperforming in the coming months as these have potentially superior weighting methodologies and a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy).

Invesco Dynamic Software ETF (PSJ - Free Report) – Up 21.8%

With AUM of $343.1 million, this ETF provides exposure to 29 software segments of the broader U.S. technology space with each accounting for less than 6.3% share. It charges 63 basis points (bps) in annual fees and trades in average daily volume of 62,000 shares. The product has a Zacks ETF Rank #2 with a High risk outlook.

SPDR S&P Software & Services ETF (XSW - Free Report) – Up 21.4%

This fund targets the software and services segment and follows the S&P Software & Services Select Industry Index. It holds 153 stocks in its basket, charging 35 bps in annual fees. XSW has accumulated $175.6 million and trades in paltry volume of 21,000 shares a day on average. It has a Zacks ETF Rank #2 with a High risk outlook.

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