Top Sector ETFs of 2017

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As we are approaching the end of 2017, it’s time to look back at the hot investing areas of 2017. This is especially true as this year has treated the broader market well. The S&P 500 has gained about 19%, the Nasdaq has crossed the 7000 mark and the Dow Jones hit several highs. However, some specific sectors shone even brighter in the galaxy of equities in 2017. Below we highlight those wining ones.

Technology

The technology sector has been on fire this year thanks to improving economic and industry fundamentals and Trump’s corporate tax reform. The rise of new technology such as cloud computing, big data and Internet of Things has acted as the wind beneath the wings (read: 5 Tech ETFs That Crushed FANG ETFs in 2017).

Among the tech ETF winners (as of Dec 18, 2017) are ARK Web x.0 ETF ARKW (up 98.5%), ETFMG Video Game Tech ETF GAMR (up 59.9%), Global X Social Media ETF SOCL (up 57%), iShares North American Tech-Software ETF IGV (up 43%) and PowerShares Dynamic Semiconductors ETF PSI (up 42.8%).

Homebuilding

The NAHB/Wells Fargo Housing Market Index increased 5 points in December to 74, marking the third successive rise, as per analysts from Wells Fargo. December recorded the biggest monthly expansion since March. According to these analysts, the index is hovering around its highest level since July 1999, indicating solid demand. Home sales have also been in great shape. iShares U.S. Home Construction ETF ITB has gained about 56% so far this year (as of Dec 18, 2017) (read: Housing ETFs to Buy in 2018).

Retail

Hopes of tax reform and rapid rise in online shopping has made this corner a winner in 2017. Amplify Online Retail ETF IBUY is up about 53.4% so far in 2017. The holiday season makes up about 20 to 40% of annual sales for many retailers. Already, Thanksgiving, Black Friday and Cyber Monday have seen a splurge in buying. Adobe predicts that “this will be the first-ever holiday season to break $100 billion in online sales.” This clearly explains why IBUY performed well in 2017 (read: November Retail Sales Steady: 3 ETF & Stock Picks).

Biotech

Ebbing tensions over the price gouging issue, hopes of easing regulation, positive clinical trials, FDA approvals of drugs and success in the immune-oncology field led to solid gains for biotech stocks. As a result, Virtus LifeSci Biotech Clinical Trials ETF BBC (up 48.1%), ALPS Medical Breakthroughs ETF SBIO (up 38.9%), SPDR S&P Biotech ETF XBI (up 37.3%) and PowerShares DWA Healthcare Momentum ETF PTH (up 47.1%) hogged attention (read: Value Biotech ETFs to Buy Now).

Clean Energy-Solar

Rising demand for solar power, huge levels of panel installation, global warming issues and efficient alternative energy application have boosted clean energy ETFs like Guggenheim Solar ETF TAN. The fund is up 46.8% so far this year (as of Dec 18).

The report from the International Energy Agency (IEA) also caused a spike in solar stocks. Per the agency, solar power expedited and outpaced the growth in the coal industry for the first time last year. This suggests the beginning of a new era for solar power (read: 5 Top-Performing Stocks of the Top ETF of October).

Energy

Prolonged oil woes are known to all. However, investors should note that the oil refining industry has performed exceptionally well. This is because it is negatively correlated to the price of oil with players in this industry using oil as an input for processing refined petroleum products like gasoline. Thus, lower oil prices are boosting margins for refiners and in turn their stocks. VanEck Vectors Oil Refiners ETF CRAK is up 42% in the year-to-date frame (as of Dec 18, 2017).

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