September has lived up to its reputation of a historically weak month for stocks. This is especially true as the S&P 500 and Nasdaq Composite Index are on track for their worst month of 2023, declining 4.6% and 4.3%, respectively. The Dow Jones has shed 3%.

Despite the weakness, a few sectors have still been in green over the past month. We have highlighted the top-performing ETFs from different sectors. These include Roundhill Cannabis ETF WEED, Sprott Junior Uranium Miners ETF URNJ, Invesco Dynamic Oil & Gas Services ETF PXJ, Invesco KBW Property & Casualty Insurance ETF KBWP and SPDR S&P Metals & Mining ETF XME.

Fears of higher rates for a longer-than-expected period and a slowing Chinese economy took the sheen away from stocks in the month. The Fed, in its latest meeting, kept interest rates steady at a 22-year high, in the range of 5.25% to 5.5%, but signaled one more hike this year. Though inflation is easing, it remains elevated and above the Fed’s 2% target. The ongoing strength in the economy and the surging oil prices threaten to revive inflationary pressure.

The latest data also showed that U.S. industrial production continued to expand in August, beating expectations even though the pace of increase decreased due to sluggish manufacturing growth. U.S. consumer sentiment slipped for the second straight month in September as the University of Michigan’s preliminary reading of its Consumer Sentiment Index dropped to 67.7 from the final reading of 69.5 in August.

Meanwhile, China, the engine of global growth, is caught in deep trouble, given falling consumer prices, a deepening real estate crisis, slumping exports and a record-high youth unemployment rate.

ETFs in Focus

We have profiled the abovementioned ETFs in detail below:

Roundhill Cannabis ETF (WEED) – Up 68.6%

Marijuana stocks have been surging on the back of a series of legislative activities that spread huge optimism across the industry. Roundhill Cannabis ETF is an actively managed ETF, designed to offer investors exposure to the cannabis sector. The fund may invest in various cannabis-related companies, including cannabis producers and distributors, cannabis-related technology companies, and additional cannabis-related ancillary businesses. It holds five stocks in its basket through the use of swaps.

Roundhill Cannabis ETF has gathered $3.4 million in its asset base. It charges 40 bps in annual fees and trades in 6,000 shares a day on average.

Sprott Junior Uranium Miners ETF (URNJ) – Up 30.7%

Uranium price has witnessed a significant surge in September underpinned by the global push to consider nuclear energy as an eco-friendly alternative to coal and gas. Uranium, used mainly in nuclear power plants, is one of the cleanest ways to produce electricity. Sprott Junior Uranium Miners ETF is the only pure-play ETF focused on small uranium miners, selected for their potential for significant revenue and asset growth.

Sprott Junior Uranium Miners ETF follows the Nasdaq Sprott Junior Uranium Miners Index, which is designed to track the performance of mid-, small- and micro-cap companies in uranium-mining-related businesses. It holds 29 stocks in its basket and charges 80 bps in annual fees. Sprott Junior Uranium Miners ETF has accumulated $111.9 million in its asset base and trades in an average daily volume of 197,000 shares.

Invesco Dynamic Oil & Gas Services ETF (PXJ) – Up 10.4%

The energy sector has made all the strides in September as oil price reached to the highest level of 2023 on tightening supply conditions and the prospect of higher demand. The global oil market is expected to face the biggest deficit in more than a decade, with the two major oil-producing nations, Saudi Arabia and Russia, extending their voluntary cuts to the end of the year. On the other hand, world oil demand is scaling record highs, driven by strong air travel, increased oil use in power generation and surging Chinese petrochemical activity.

Invesco Dynamic Oil & Gas Services ETF follows the Dynamic Oil Services Intellidex Index, which thoroughly evaluates companies based on a variety of investment merit criteria, including price momentum, earnings momentum, quality, management action and value. It holds 31 stocks in its basket. Invesco Dynamic Oil & Gas Services ETF has accumulated $43.8 million and charges 63 bps in fees per year. It trades in an average daily volume of 21,000 shares and has a Zacks ETF Rank #5 (Strong Sell) with a High risk outlook.

Invesco KBW Property & Casualty Insurance ETF (KBWP) – Up 4.8%

Invesco KBW Property & Casualty Insurance ETF provides exposure to the 25 leading national money centers and regional banks or thrifts. It follows the KBW Nasdaq Property & Casualty Index. Invesco KBW Property & Casualty Insurance ETF is concentrated on the top five firms that make up more than 8% share each.

Invesco KBW Property & Casualty Insurance ETF has managed $150.4 million in its asset base and expense ratio of 0.35%. KBWP trades in average daily volume of 22,000 shares but has a Zacks ETF Rank #4 (Sell) with a Medium risk outlook.

SPDR S&P Metals & Mining ETF (XME) – Up 4.6%

SPDR S&P Metals & Mining ETF offers broad exposure to the U.S. metal and mining industry by tracking the S&P Metals and Mining Select Industry. It holds 32 stocks in its basket, with steel firms accounting for 51.4% of the portfolio, while coal & consumable fuels, and gold round off the next two spots with double-digit exposure each.

SPDR S&P Metals & Mining ETF has an expense ratio of 0.35% and AUM of $1.7 billion. It trades in an average daily volume of around 3 million shares.
SPDR S&P Metals & Mining ETF (XME): ETF Research Reports

Invesco Oil & Gas Services ETF (PXJ): ETF Research Reports

Invesco KBW Property & Casualty Insurance ETF (KBWP): ETF Research Reports

Roundhill Cannabis ETF (WEED): ETF Research Reports

Sprott Junior Uranium Miners ETF (URNJ): ETF Research Reports

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