Outperforming ETF Could Keep Rallying in June

New weight loss drugs have helped the biotech sector lately

Deputy Editor
Jun 6, 2024 at 2:21 PM
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One of our favorite parts of rolling into a new month at Schaeffer’s is digging into seasonality and historic trends of stocks, sectors, and exchange traded funds (ETFs). This week, we've already looked at individual stocks that tend to outperform in June, but now we’re shifting gears to ETFs. Schaeffer’s Senior Quantitative Analyst Rocky White pulled a list of 25 ETFs that usually outperform June, going back 10 years.

The SPDR S&P Biotech ETF (XBI) placed as the best performing ETF of the bunch. In the last decade, XBI averaged a 6.1% return for the month of June, finishing eight out of the 10 years with a gain. The next best ETF on the list is the Global X Social Media ETF (SOCL), which averaged a 3.6% gain, with 70% of those returns positive.

BEST ETFs June 062024

XBI has tacked on over 18% in the last nine months, as biotech stocks moved higher thanks in part to the increasing popularity of weight loss treatments. XBI boasts a more modest 4.2% year-to-date lead, and is down 1.3% at $92.93 at last check, making now a great opportunity to buy the dip. It's also important to watch the ETF moving forward as the Federal Reserve faces pressure to reduce interest rates.

A shift in the options pits could provide tailwinds for the XBI. Data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) shows XBI sports a 10-day put/call volume ratio of 3.54 that sits higher than 89% of annual readings. 

 

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