3 High-Momentum ETFs Accelerating Towards Unstoppable Gains

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  • Here are three top high-momentum ETFs.
  • AdvisorShares Restaurant ETF (EATZ): Restaurants stocks have strong, positive catalysts.
  • Spear Alpha ETF (SPRX): SPRX is benefiting from the strength of AI and cybersecurity.
  • iShares MSCI India ETF (INDA): India’s economy is growing rapidly. 
high-momentum ETFs - 3 High-Momentum ETFs Accelerating Towards Unstoppable Gains

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Exchange traded funds, or ETFs, have multiple advantages over stocks and mutual funds. ETFs are much less risky than stocks, as they reflect the performance of many stocks. As a result, poor quarterly results, improprieties by one firm won’t generally cause ETFs to tumble. Of course, such events could easily result in a single stock tumbling 20%-30% over a period of several days. And unlike mutual funds, ETFs often focus on relatively narrow themes, such as solar energy, China or autonomous driving. Also noteworthy is that it’s much easier to trade ETFs than mutual funds, which can only be traded once per day. ETFs also tend to charge investors lower fees than mutual funds. Here are three high-momentum ETFs that are likely to keep shining for the foreseeable future.

AdvisorShares Restaurant ETF (EATZ)

Portrait of a happy waitress standing at restaurant entrance holding digital tablet. Restaurant.
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Restaurant stocks have multiple, strong, positive catalysts, leaving the AdvisorShares Restaurant ETF (NYSEARCA:EATZ) very well-positioned to climb significantly going forward. The 7.3% spread between the Consumer Price Index and the Producer Price Index indicates that the prices which restaurants can charge are climbing much more quickly than their costs.

Also helping restaurants are the continued, strong travel trends, since, of course, consumers tend to eat out nearly all the time when they’re traveling.

Restaurant stocks are generally helped by the continuous, strong travel trends, as consumers tend to eat out more frequently while traveling. Additionally, Americans’ increased spending at restaurants and bars jumped a seasonally adjusted 0.7% in January versus December.

Among the ETF’s top ten holdings are Chipotle (NYSE:CMG), Wingstop (NASDAQ:WING) and Darden (NYSE:DRI), all of which are growing rapidly .

EATZ stock advanced 31% between October and February , showing that the ETF is benefiting from the strength of restaurants these days.

Given these points, I view EATZ as one of the best high-momentum ETFs to buy now.

Spear Alpha ETF

Blocks that spell out ETF in front of jar with money and change.
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The Spear Alpha ETF (NASDAQ:SPRX) has been benefiting tremendously from the huge strength of AI, cybersecurity and tech in general as its shares have soared 67% from October lows. According to the fund’s managers, it invests in firms with the potential to transform the technology sector.

Interestingly, the firm’s top two holdings are getting tremendous boosts from the AI boom, while its third and fourth largest holdings are cybersecurity standouts.

Nvidia (NASDAQ:NVDA), the ETF’s top holding, is generating huge profits by selling its very powerful and extremely popular AI chips. Meanwhile, AMD (NASDAQ:AMD), its second-largest position, has developed its own AI chips and expects to generate needle-moving revenue of $3.5 billion from them this year.

The ETF’s next two largest holdings — Zscaler (NASDAQ:ZS) and SentinelOne (NYSE:S) — are, as I mentioned above, leaders in the cybersecurity space.

According to one source, “Ransomware cost the world $20 billion in 2021. That number is expected to rise to $265 billion by 2031.” Consequently, I expect companies’ spending on cybersecurity to grow tremendously over the longer term.

iShares MSCI India ETF (INDA)

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India’s economy is growing very rapidly. The International Monetary Fund expects it to expand at an impressive 6.5% pace this year and next year.

Among the key drivers of the strong growth are high government expenditures on infrastructure and the decisions of many large Western companies to transfer all or parts of their manufacturing operations to India. Among the firms looking to build factories in the country are Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA).

Of course, these trends are quite positive for Indian companies, so it’s not surprising that the iShares MSCI India ETF (BATS:INDA) has jumped 20% since October 26.

With India’s central bank reporting that the country’s businesses are further boosting the economy by raising their investments, India’s outlook remains very strong, boding very well for INDA stock.

On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been SMCI, INTC, and MGM. You can reach him on Stocktwits at @larryramer.


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