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3 ETFs That Could See Additional Gains Before The End Of The Year

Published 29/09/2021, 10:02
NDX
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US500
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HAIL
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NERD
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CRSR
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259960
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Broader markets have come under pressure in September. So far in the month, the Dow Jones Industrial Average, the S&P 500 and the NASDAQ 100 are down around 2.4%, 2.3% and 2.6%, respectively.

As we get ready to enter the last quarter of the year, many investors are wonderig which sectors could be ready for a rebound. Therefore, today we’ll discuss three exchange-traded funds (ETFs) that could apply to readers who are looking to buy the dips.

1. Amplify Online Retail ETF

  • Current Price: $111.77
  • 52-week Range: $87.73 – $141.00
  • Dividend Yield: 0.54%
  • Expense Ratio: 0.65% per year

According to metrics from the Census Bureau of the Department of Commerce, “US retail e-commerce sales for the second quarter of 2021, adjusted for seasonal variation, but not for price changes, was $222.5 billion, an increase of 3.3 percent (±0.7%) from the first quarter of 2021.”

Our first fund, the Amplify Online Retail ETF (NYSE:IBUY), gives access to businesses that generate significant revenue from online sales. The fund started trading in April 2016.

IBUY, which has 72 holdings, tracks the returns of the EQM Online Retail Index. The top 10 names comprise about 27% of net assets of $1.1 billion. In terms of sectors, we see traditional retail (52.4%), followed by marketplace (39.3%) and travel (8.3%).

Around 74% of the businesses are based in the US. Next in line are those from China, Germany, the UK and the Netherlands.

Leading holdings include Stamps.com (NASDAQ:STMP), which provides Internet-based mailing solutions; logistics platform DoorDash (NYSE:DASH); online fashion retailer Revolve Group (NYSE:RVLV); e-commerce group Etsy (NASDAQ:ETSY); and digital used car dealer Carvana (NYSE:CVNA)).

The fund returned 32% up in the past 12 months, but is about flat so far in 2021. Many of the names in the ETF have come under pressure since mid-February when IBUY had hit a record high. Buy-and-hold investors could consider investing around these levels.

2. SPDR S&P Kensho Smart Mobility ETF

  • Current Price: $55.44
  • 52-week Range: $36.66 – $71.43
  • Dividend Yield: 1.04%
  • Expense Ratio: 0.45% per year

The SPDR S&P Kensho Smart Mobility (NYSE:HAIL) invests in firms that are at the forefront of smart transportation, including autonomous vehicle technology, drones and tracking systems. The fund was first listed in December 2017.

HAIL Weekly
Recent research suggests, “The global smart transportation market was valued at $57.9 billion (€48.74 billion) in 2018 and is expected to reach $191.3 billion (€161.03 billion) in 2026, growing at a compound annual growth rate (CAGR) of 16.4%.”

HAIL, which has 79 holdings, tracks the returns of the S&P Kensho Smart Transportation Index. The leading 10 names make up about 20% of net assets of 182 million.

In terms of sectors, automobile manufacturers have the highest slice with 19.86%. Then come auto parts & equipment (16.49%) and semi conductor (13.14%) firms.

Among the top names in the roster are the developer of image processing and computer vision solutions Ambarella (NASDAQ:AMBA); Aspen Aerogels (NYSE:ASPN), which designs automotive safety electronic products; Veoneer (NYSE:VNE), which manufactures sensor integrated circuits; semiconductor group Allegro Microsystems (NASDAQ:ALGM)), went public in November 2020; and electric vehicle (EV) heavyweight Tesla (NASDAQ:TSLA).

The fund returned about 53% up in the past 52 weeks and 3% year-to-date. HAIL also hit a record high in February. P/E and P/B ratios stand at 15.23 and 2.85. Interested readers could begin to find value around these levels.

3. Roundhill BITKRAFT Esports & Digital Entertainment ETF

  • Current Price: $25.59
  • 52-week Range: $24.33 – $39.38
  • Dividend Yield: 0.39%
  • Expense Ratio: 0.50% per year

Our final fund, namely the Roundhill BITKRAFT Esports & Digital Entertainment ETF (NYSE:NERD), offers exposure to e-sports & digital entertainment. The fund began trading in June 2019.

NERD Weekly

Industry research group MarketsandMarkets points out:

“The overall esports market is expected to grow from $694.2 million in 2017 and is expected to reach $2,174.8 million by 2023, at a CAGR of 18.61% between 2018 and 2023… Major revenue streams for esports include media rights; tickets and merchandise; sponsorships; direct advertisements; and publisher fees.”

NERD, which has 37 holdings, tracks the Roundhill BITKRAFT Esports Index. The top 10 stocks make up about 40% of net assets of $75 million. In terms of sectors in the fund, we see games (41.4%), followed by media (26.0%) and hardware (24.1%) companies.

Around 28% of the businesses come from the US. Next in line are China (22.1%), Japan (8.9%), South Korea (8.3%) and Sweden (7.4%). Leading holdings include the South Korean gaming company Krafton (KS:259960); Chinese heavyweight Tencent (HK:0700) (OTC:TCEHY); gaming hardware group Corsair Gaming (NASDAQ:CRSR), publisher of interactive entertainment content Activision Blizzard (NASDAQ:ATVI), which is making headlines with workplace issues; and Chinese video game streaming platform DouYu International (NASDAQ:DOYU).

The fund returned 5% up in the past year, but is down around 14% in 2021. Like the two other ETFs we discussed, NERD also hit an all-time high in February. Potential investors who believe that the down move is likely to end soon could consider buying around the current levels.

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