The start of 2019 has been great for global markets and the wining momentum is expected to continue in March. Central banks have been dovish, trade war has taken a backseat for the time being and Brexit could be delayed. Apart from global growth tensions (which by now is highly priced-in), no major roadblock for markets is in sight in March.
In any case, the month of March has historically been blissful for the stock market. In fact, a consensus carried out from 1950 to 2018 shows that March ended up offering positive stock returns in 43 years and negative returns in 26 years, per moneychimp.com, with an average positive return of 1.05%. The return is the fourth highest, considering monthly performances.
Against this backdrop, below we highlight a few ETFs that could prove to be gainful in the third month of 2019.
Vanguard Mid-Cap Growth ETF (WA:VOT)
With global growth slowing, central banks of the developed economies are likely to be dovish. The U.S.-China trade relation is also showing signs of improvement. If a full-scale deal is reached, global growth can be restored to some extent. In such a situation, investors can play mid-cap growth ETFs like VOT and gain glimpses of both, domestic and foreign economies (read: 5 Ultra-Cheap Top-Ranked Growth ETFs to Buy Now).
Renaissance IPO ETF (TO:IPO)
Expectations are high that IPOs will stage a great show in 2019. In late February, Up Fintech and NASH biotech Genfit came up with IPO filings. Cardiovascular disease device maker ShockWave Medical, Diamondback midstream services unit Rattler Midstream LP, and NASH biotech Cirius Therapeutics (CSTX) are also on their way for a March IPO.
Biotech IPOs are typically trending right now. Then there are bigger names like Uber Technologies Inc.’s planned listing. Lyft Inc. has also been awaiting the SEC’s response on its confidential IPO filing. According to several sources, Lyft plans to list its stock on the Nasdaq by the end of March, while Uber may make its debut in late 2019. This euphoria can be tapped via Renaissance IPO ETF (TO:IPO) . (read: Will IPO ETFs Sizzle in 2019?).
ETFMG Alternative Harvest ETF (SNX:MJ)
Marijuana ETF has reached a point this year where investors may start doubting if this is the time to sell the rally. It is up 48% this year and looks destined for further rally ahead. FDA may regulate CBD in April – a demand from many companies selling food and drinks infused with CBD. The demand is so high that hemp-CBD market revenues may shoot up from $390 million in 2018, to about $1.3 billion by 2022. Canopy Growth may develop new pot-based products for animals along with humans with the help of lifestyle guru Martha Stewart.
SPDR S&P Biotech (NYSE:XBI) ETF XBI
Biotech stocks have seen their best-ever start to a year since 2012. A solid merger-and-acquisition momentum has been driving the rally. Research and development as well as deals are being made in the oncology and gene therapy segments. So, investors should tap this high momentum at this moment (read: What's Behind the Biotech ETF Rally to Start 2019?).
Invesco Dynamic Software ETF PSJ
The rally in technology stocks is here to stay. Rising demand for emerging technologies, increasing efforts for automation and rising spending on enterprise software especially cloud (per Gartner) had already made the space a certain winner. Gartner projects a 3.2% uptick in global IT spending to $3.77 trillion in 2019.The fund has considerable weight in companies like Intuit (NASDAQ:INTU), Cadence Design (NASDAQ:CDNS) Systems, Atlassian Corp, VMware, Oracle (NYSE:ORCL) and Red Hat (read: Top-Ranked ETF Winners in Dow's Longest Rally in 24 Years).
Invesco DB Base Metals Fund DBB
In late-February, President Donald Trump announced a postponement in the increase of tariffs on about $200 billion worth of Chinese goods, noting “substantial progress” in trade talks with Beijing. Though it is yet unclear if both parties can reach a concrete deal, cues of reconciliation charged up industrial metal ETFs as China is a huge user of those metals. Industrial metals are off to the best start to a year in 2019 since before the financial crisis. The fund is mainly made up of zinc, aluminum and copper (read: Why Materials & Mining ETFs Are Riding Higher).
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Vanguard Mid-Cap Growth ETF (VOT): ETF Research Reports
Renaissance IPO ETF (IPO): ETF Research Reports
Invesco DB Base Metals Fund (DBB): ETF Research Reports
SPDR S&P Biotech ETF (XBI): ETF Research Reports
Invesco Dynamic Software ETF (PSJ): ETF Research Reports
ETFMG Alternative Harvest ETF (MJ): ETF Research Reports
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Zacks Investment Research