ETFs For The Brave: Are These High-Octane Funds Your Best Bet To Ride An Upward Market Swing?

When markets are volatile like these days, high-beta ETFs and high-momentum ETFs provide huge opportunities if you have the stomach for the whipsaws.

Beta gauges a stock’s sensitivity to market action. A high-beta ETF invests in shares that tend to move more dramatically than the overall market. That is, they tend to perform better in a rally but drop harder in a decline. These funds can be highly useful for the risk-on investor during the rebound phase.

High momentum ETFs focus on stocks recently showing a strong price uptick. The rationale is based on the idea that winners tend to keep winning. These ETFs are best suited for bullish or trending market conditions.

Also Read: ETF, Equity Trading Access Goes Live On Kraken As Platform Enters Traditional Markets

Here are some top-performing ETFs worth taking a closer look at:

• Invesco S&P 500 High Beta ETF (NYSE:SPHB): Follows the 100 highest beta stocks in the S&P 500, which makes it one of the most popular funds to use when markets are rebounding.

• iShares MSCI USA Momentum Factor ETF (MTUM): Targets U.S. stocks with high recent returns, picking up on positive trends across industries.

• Invesco Dorsey Wright Momentum ETF (NASDAQ:PDP): Applies a relative strength strategy to choose the best performers—a good one for trend-followers who desire market leader exposure.

Yet, if you want to play it safe:

• Invesco QQQ Trust (NASDAQ:QQQ) provides broad market exposure with a long-term growth focus.

• Consumer Staples Select Sector SPDR ETF (NYSE:XLP) is a defensive investment, giving stability from businesses whose products are still in demand during all economic times.

Market Recap: Bounce Or Just A Breather?

Wall Street continued to be volatile due to tariff uncertainty. At last check Monday, the Dow increased 0.78%, the Nasdaq gained 0.64%, and the S&P 500 added 0.79%. Yet all three indexes fluctuated between gains and losses throughout the session—a reflection of the fragile sentiment among investors. All the indexes have inched down by less than 1% by Tuesday afternoon.

President Donald Trump temporarily exempted some tech products from new tariffs and pledged to “help” automakers, following a recent 25% tariff. This sent shares higher.

Adding to the cheer, the CBOE Volatility Index (VIX), Wall Street’s gauge of fear, fell 3% as of today, making equities a little more attractive.

Yet, the bigger picture is conflicted. Since the April 2 tariff shock, the major indexes are 4–5% below where they stood.

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