- GLD has gained 18.9% year-to-date, with Comex gold futures now trading around $1,265 per ounce, which has helped riskier stock ETFs shine
- QQQ, which tracks the Nasdaq-100, rose 7.3% over past month
- IWM gained 8.2% over past month
- SPY returned 7.2% over past month
- Among sector bets, energy has been the best performer in the six months after a gold rally, followed by materials and technology sectors
Safe-haven gold experienced a stellar rally this year. However, as defensive bets run their course, stock exchange traded funds could enjoy a rally on a return to a risk-on environment.
The SPDR Gold Shares (NYSEArca: GLD) gained 18.9% year-to-date, with Comex gold futures now trading around $1,265 per ounce.
Gold’s big quarterly gain could be a bullish signal for stocks. According to Kensho historical data in quarters where gold increased 10% or more since 1990, U.S. benchmarks have reliably surged higher in the six months after gold’s move, reports Deirdre Bosa for CNBC.
Notably, relatively riskier indices, like the Nasdaq Composite and small-cap Russel 2000, have outperformed the S&P 500 and blue chip Dow Jones Industrial Average.
Over the past month, the PowerShares QQQ (NasdaqGM: QQQ), which tracks the Nasdaq-100, rose 7.3%, iShares Russell 2000 ETF (NYSEArca: IWM) gained 8.2% and SPDR S&P 500 ETF (NYSEArca: SPY) returned 7.2%.
Among sector bets, energy has been the best performer in the six months after a gold rally, followed by materials and technology sectors.
ETF investors in the oil industry can track broad sector plays like the Energy Select Sector SPDR (NYSEArca: XLE), Vanguard Energy ETF (NYSEArca: VDE), iShares U.S. Energy ETF (NYSEArca: IYE) and Fidelity MSCI Energy Index ETF (NYSEArca: FENY).
For materials exposure, investors can look to the Materials Select Sector SPDR (NYSEArca: XLB), Vanguard Materials ETF (NYSEArca: VAW), iShares U.S. Basic Materials ETF (NYSEArca: IYM) and Fidelity MSCI Materials Index ETF (NYSEArca: FMAT).
Looking into overseas markets that have generated two-digit percentage returns, the Germany DAX index has also rebounded an average 11.5% after a strengthening gold. Additionally, in Asia, Hong Kong’s Hang Seng has returned over 13% on average.
Investors can gain exposure to Germany through country-specific ETFs, such as the iShares MSCI Germany ETF (NYSEArca: EWG), the largest Germany-related ETF. The Recon Capital DAX Germany ETF (NasdaqGM: DAX) is the only U.S.-listed DAX-tracking ETF. The First Trust Germany AlphaDEX Fund (NYSEArca: FGM) takes a smart-beta approach to selecting components based on growth and value factors.