Finding exchange traded funds chock full of companies that are positively revising earnings estimates is becoming increasingly difficult in the current environment.
A recent examination of ETFs littered with companies doing just the opposite proves as much. However, there are some funds that are homes to companies that are lifting forecasts and, not surprisingly, those ETFs are performing better than the broader market.
“Buoyed by their improving outlooks, these funds have performed better as a group than the market overall. On average these funds declined 3.0% over the past 30 days, compared with -5.3% for the S&P 500 SPDR SPY and the and -5.7% for the iShares MSCI ACWI ETF ACWI of global stocks,” said the ETF Research Center (ETFRC) in a recent note.
Here are three ETFs where the components are looking good on the earnings front.
Invesco Dynamic Semiconductors ETF (PSI)
This one may comes as a surprise given the recent weakness among semiconductor stocks, but the Invesco Dynamic Semiconductors ETF PSI tops the ETFRC list for biggest positive earnings revisions over the past month at 5.9%.
PSI follows the Dynamic Semiconductor Intellidex Index, which is “designed to provide capital appreciation by thoroughly evaluating companies based on a variety of investment merit criteria, including: price momentum, earnings momentum, quality, management action, and value,” according to Invesco.
Nvidia NVDA and Advanced Micro Devices AMD combine for 12% of PSI's weight.
Invesco Global Listed Private Equity ETF (PSP)
The Invesco Global Listed Private Equity ETF PSP is one of the funds in a sparesely populated ETF category and features a collection of private equity firms, business development companies (BDCs) and master limited partnerships (MLPs).
Proving that these type of companies have handled the recent volatility with some earnings aplomb, positive revisions here check in at 4.1%, according to ETFRC data.
PSP is also an income play as highlighted by the fund's trailing 12-month distribution rate of 6.34%.
Invesco S&P SmallCap Utilities & Communication Services ETF (PSCU)
Even utilities belied their normally defensive reputation during the recent market swoon and small caps were hardly better. However, that combination isn't derailing the Invesco S&P SmallCap Utilities & Communication Services ETF PSCU from being a surprise on the earnings, placing third on the ETFRC list behind PSI and PSP.
Over 55% of PSCU's roster is allocated to communication services, but its top four utilities holdings combine for over 36% of the fund's weight.
Positive earnings revisions have been north of 3% for PSCU over the past month.
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