The market sell-off has dragged on growth stocks. With the Nasdaq recovering, some sector exchange traded funds may surprise investors.
While a rebound in growth stocks may cause investors to turn back to the PowerShares QQQ (NasdaqGM: QQQ), which tracks the tech heavy Nasdaq-100, the technology sector may not be the best area to look to.
According to Kensho’s data on best historical trades, materials has been the best performing S&P 500 sector when the Nasdaq 100 rallied, reports Deirdre Bosa for CNBC.
Kensho found that over 17 times since 2006 when the Nasdaq 100 jumped 10% or more in one month, the materials sector returned an average 11.1%, followed by consumer discretionary 10.1%, industrials 10.0% and information technology 9.6%.
ETF investors who are interested in following the materials sector can take a look at the Materials Select Sector SPDR (NYSEArca: XLB), Vanguard Materials ETF (NYSEArca: VAW) and iShares U.S. Basic Materials ETF (NYSEArca: IYM).
For consumer discretionary exposure, investors can follow the iShares US Consumer Services ETF (NYSEArca: IYC), Vanguard Consumer Discretionary ETF (NYSEArca: VCR) and Consumer Discretionary Select Sector SPDR (NYSEArca: XLY).
The Industrial Select Sector SPDR (NYSEArca: XLI), Vanguard Industrials ETF (NYSEArca: VIS), iShares U.S. Industrials ETF (NYSEArca: IYJ) and Fidelity MSCI Industrials Index ETF (NYSEArca: FIDU) provide broad exposure to the industrials space.
Lastly, investors who want exposure to tech sector ETFs can track the Technology Select Sector SPDR (NYSEArca: XLK), iShares U.S. Technology ETF (NYSEArca: IYW) and Vanguard Information Technology ETF (NYSEArca: VGT).
On the other hand, safe-haven plays typically fall out of favor when investors turn to growth stocks. For instance, gold and the dollar index typically underperform when the Nasdaq rebound, according to Kensho data.
ETF investors can also hedge against a weakening U.S. dollar with the PowerShares DB US Dollar Index Bearish Fund (NYSEArca: UDN), which takes the inverse or short performance of the U.S. dollar against a basket of six major currencies.
Additionally, for a bearish gold position, investors can take a look at the ProShares UltraShort Gold (NYSEArca: GLL), which provides a two times inverse or -200% daily performance of gold bullion. Alternatively, ETN options include the DB Gold Double Short ETN (NYSEArca: DZZ), which tries to generate the twice inverse or -200% return of the daily performance of gold, DB Gold Short ETN (NYSEArca: DGZ), which tries to reflect the inverse of gold price movements, and VelocityShares 3x Inverse Gold ETN (NYSEArca: DGLD), which tries to reflect the performance of three times the inverse or -300% daily performance.
Max Chen contributed to this article.