July is, so far, seeming like a continuation of the trends that came in June. Growth ETFs remain at historic highs, tech thematic-oriented ETFs are reaching new heights, and China is reaching two-year highs as well. ETF Trends’ CEO Tom Lydon, and David Mazza, head of product at Direxion, hopped on this week’s “ETF Trends” to break down the ETF products attracting investors in July with CNBC’s Bob Pisani.
To start with a macro look at how things are going, Lydon explains how FAANG stocks, as well as Microsoft, have been able to hold the S&P for a great degree, given how they represent 20% of the market cap. That said, the entertainment, communication, and other work-from-home stocks have helped investors embrace the new environment they are in.
“It’s really been more of the same for July, and I think investors are benefiting from that,” Lydon adds.
Grab The Energy Bull
As far as some of the big ETF movers for Direxion, the Direxion Daily China Energy Bull (ERX) is one of the best performing ETFs of the year, being up nearly 60%. Discussing China’s investing, Mazza notes how ERX is a fund targeted towards taxable traders, but the underlying exposure are names like Tencent and Alibaba, each over 9% of the index.
“In the last week, China A was up nearly 7%. In a zero to date performance, I think some people may have not realized is 8%. It’s at the highest level of the broad market since July 2015,” Mazza notes.
This shows that turnover has increased, and authorities are encouraging Chinese retail to get involved with the stock market again, which has been a low-key exposure for a while. That’s making the return of China to the stock market interesting from an equity market perspective.
Watch Tom Lydon Talk July’s Hit ETFs:
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