Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

2 ETFs That Could See Better Days In December

By (Tezcan Gecgil/ )ETFsDec 02, 2021 18:13
2 ETFs That Could See Better Days In December
By (Tezcan Gecgil/ )   |  Dec 02, 2021 18:13
Saved. See Saved Items.
This article has already been saved in your Saved Items

The final week of November brought increased volatility to broader markets. But when looking at the year as a whole, so far the Dow Jones, the S&P 500 and the NASDAQ 100 are up 12.9%, 22.0% and 25.8%, respectively.

However, not every industry has seen positive returns in 2021. For example, we recently outlined sectors and a range of exchange-traded funds (ETFs) that fell in November and failed to post positive returns this year. But the year isn't yet over, so today, we introduce two funds that could potentially fare better in the weeks ahead.

1. SPDR S&P Pharmaceuticals ETF

  • Current Price: $45.38
  • 52-Week Range: $45.26 - $56.32
  • Dividend Yield: 0.65%
  • Expense Ratio: 0.35% per year

The US represents the largest market for pharmaceutical products globally. Recent metrics suggest that in 2020 the country spent about $514 billion on pharma sales, close to half the revenue worldwide.

The COVID-19 pandemic has put the biopharma industry in the limelight. Companies have rushed to develop vaccines as well as medicines to fight the disease.

As a result, in the past 52 weeks, the Dow Jones Pharmaceuticals Index returned more than 15%. However, in November it was down over 2%, and most of the declines came last week.

Investors are especially debating whether vaccines by Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) as well as Moderna (NASDAQ:MRNA), Johnson & Johnson (NYSE:JNJ) and AstraZeneca (NASDAQ:AZN) will be effective against the Omicron variant of COVID-19.

The SPDR® S&P Pharmaceuticals ETF (NYSE:XPH) invests in pharmaceutical names in the US. The fund started trading in June 2006.

XPH Weekly Chart.
XPH Weekly Chart.

XPH, which has 47 holdings, tracks the S&P Pharmaceuticals Select Industry Index. The top 10 names make up about 55% of net assets of $215.4 million. Analysts note that these names with large moats have competitive advantages over their smaller competitors.

Leading holdings include drug manufacturing giants Pfizer, Eli Lilly (NYSE:LLY), Merck (NYSE:MRK) and Johnson & Johnson; Royalty Pharma (NASDAQ:RPRX), the largest purchaser of biopharmaceutical royalties; and animal health group Zoetis (NYSE:ZTS).

Year-to-date, XPH is down 11.9%. Price/Earnings (P/E) and Price/Book (P/B) ratios are 8.43x and 3.00x, respectively. Interested readers could consider buying around these levels.

2. US Global Jets ETF

  • Current Price: $19.38
  • 52-Week Range: $19.78 - $28.98
  • Expense Ratio: 0.60% per year

In the early days of the pandemic in 2020, travel related shares saw significant declines. Since then, we have seen a robust recovery, especially in air travel.

However, global airlines are now bracing for a fresh round of uncertainty over the Omicron variant. For instance, in the past week, the Dow Jones US Airlines Index was down about 5%. It also lost more than 2% in 2021.

Executives especially wonder “how the Omicron variant may affect business travel.” In 2020, the global aviation market was valued around $170 billion. Between 2021 and 2026, analysts forecast a compound annual growth rate (CAGR) of more than 4%.

Our next fund, the US Global Jets (NYSE:JETS) invests in the global airline industry, including airline operators as well as manufacturers. The fund was first listed in April 2015.

JETS Weekly Chart.
JETS Weekly Chart.

JETS, which has 50 stocks, tracks US Global Jets Index. The leading 10 holdings comprise close to 60% of net assets of $3.23 billion. In fact, the top names make up more than 40% of the ETF, and include Southwest Airlines (NYSE:LUV), American Airlines (NASDAQ:AAL), United Airlines Holdings (NASDAQ:UAL) and Delta Air Lines (NYSE:DAL).

Also part of the fund are JetBlue Airways (NASDAQ:JBLU), Allegiant Travel (NASDAQ:ALGT), Air Canada (TSX:AC), SkyWest (NASDAQ:SKYW), Alaska Air (NYSE:ALK) and Hawaiian Holdings (NASDAQ:HA).

The fund is down 9.3% in 2021 and 7.9% in the last 12 months. P/E and P/B ratios are 13.48x and 3.62x. Long-term investors could consider investing around these levels, and especially when the price dips below $20.

2 ETFs That Could See Better Days In December

Related Articles

2 ETFs That Could See Better Days In December

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email