Best ETF Areas of October – November 1, 2022

Wall Street was buoyant in October, with the S&P 500 adding 5.1% over the past month (through October 30, 2022), the Dow Jones gaining 10.7%, the Nasdaq up 1.3% and the Russell 2000 up 7.5%. Speculation that the Fed may slow the pace of rate hikes from December and better corporate earnings boosted the stock market. Additionally, the fourth quarter was historically buoyant for markets, as several sales-boosting events lined up for the busy holiday season.

Below, we highlight some of the best-performing ETF sectors in October.


S&P Oil & Gas Eqpt & Services SPDR (XES free report) – up 36.8%

Vanek Oil Services ETF (OIH free report) – 35.3%

Oil prices rose sharply in October after OPEC+ producers agreed to deep output cuts, fueling a recovery in crude prices despite repeated calls by US President Joe Biden’s administration for the group to lower fuel prices and control global inflation.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, have decided to cut production targets by about two million barrels per day from November. As cited on CNBC, energy analysts had widely expected the group to cut production in the range of 500,000 barrels and two million barrels. Fears of supply shortages boosted oil prices (read: Oil ETFs rise on steep OPEC+ output cuts).

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Carbon Allowance

CraneShares European Carbon Allowance ETF (KEUA free report) – up 29.3%

iPath Series B Carbon ETN (GRN free report) – up 26.6%

Greenery has become a mantra to save the earth. Governments around the world are focused on moving towards net-zero emissions by 2050 as set by the 2015 Paris Agreement. Some companies are voluntarily trying to reduce their carbon footprint.

Another way companies can manage their carbon footprint is by buying and selling emission allowances. In a cap-and-trade system, the government sets a limit on total emissions that is tightened over time. Large carbon emitters must purchase these pollution permits to stay within regulatory limits. Such programs have increased carbon-allowance exchange-traded products.

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Turkey iShares MSCI ETF (TUR free report) – up 18.9%

The Borsa Istanbul 100 index was in solid shape as investors continued to use equities as a hedge against rising prices and a falling lira. The central bank has continued to cut rates despite rising inflation. Turkey’s central bank cut its key interest rate by 150 basis points to 10.5% from 12% in October – despite Turkey’s inflation hovering above 83%. It marked the third straight month of cuts and bolstered the equity market (Read: This Emerging Market ETF Breezes Past S&P 500 in 2022).

Aerospace & Defence

US Aerospace & Defense iShares ETF (ITA free report) – up 17.3%

Aerospace and defense stocks have rallied recently on rising geopolitical tensions. The Russia-Ukraine war is unlikely to end anytime soon, North Korea’s saber rattling is on the rise, and Sino-Taiwan tensions have flared since President Xi took office for a third term. Rising geopolitical tensions could increase defense spending by the United States and its European allies as they try to counter the military ambitions of China and Russia.

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US Global Jets ETF (JETS free report) – up 17.1%

Travel is likely to pick up sharply in the coming holiday season despite high inflation. After two years of travel bans, restrictions and lockdowns, Americans are ready to hit the road. Thanksgiving and Christmas are typically the two most traveled holidays in the fourth quarter.

According to Hopper’s 2022 Holiday Travel Outlook, released in September, the cost of a domestic plane ticket is $350 for Thanksgiving travel and $463 for Christmas travel. Thanksgiving prices are 22% higher than in 2019 and 43% higher than in 2021. Christmas airfares are currently 31% higher than in 2019 and 39% higher than last year (Read: Should You Buy Leisure & Travel ETFs?).


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