Best ETFs For July 2021Outlier stocks tend to crush the market. They are the 4% of stocks accounting for 100% of the stock market’s gains above treasuries for the last century. Hendrik Bessembinder proved it with his research in his paper “Do Stocks Outperform Treasury Bills?”
That’s why I spend my time crafting portfolios chock full of outlier stocks. If you choose right, you’ll have enormous gains on your hands in the years to come.
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Now, I pick my ETFs perhaps a bit differently than other people. I can find outlier ETFs by tracking the Big Money. But that alone isn’t enough: when I catalog the components and find outlier stocks underneath… that’s the winning recipe.
That’s how I found the best big-money ETFs for July.
First, I looked at all ETFs making Big Money signals by going to MAPsignals.com and scanning the Big Money ETF Buys and Sells chart. I looked for recent days with heavy buying (the bright blue spikes):
Once I knew which ETFs Big Money was buying, then I wanted the best opportunities. Remember: ETFs are just baskets of stocks. MAPsignals specializes in scoring more than 6,000 stocks daily. Therefore, if I know which stocks make up the ETFs, I can apply the stock scores to the ETFs. Then I can rank them all strongest to weakest.
Once the ETFs were sorted, I noticed Real Estate funds at the top. That’s why this month the top ETF is IYR.
#1 IYR – iShares U.S. Real Estate ETF
As we can see- there was a lot of Big Money buying plowing into this ETF over the last year. It accelerated noticeably since February:
IYR holds some great stocks. One fine example is PLD (Prologis, Inc.). Below are Big Money signals for PLD:
#2 BOTZ – Global X Robotics & Artificial Intelligence ETF
A.I. and Robotics are undoubtedly a huge part of our future. Big Money thinks so too. Look at the buying of BOTZ over the last year below.
One great example stock that BOTZ holds is Intuitive Surgical. They make the surgical robot called DaVinci. It allows remote surgery- a phenomenal technology.
#3 VDE – Vanguard Energy Sector ETF
Energy was an unloved sector last year. But it’s having a sudden resurgence. Big Money has been buying VDE:
VDE holds a bunch of great energy stocks. One such stock that has been a Big Money darling in the past is FANG which is seeing a rebirth:
#4 LIT – Global X Lithium ETF
Like it or not, lithium is the power of the foreseeable future for EVs. Look at all that green last year:
And LIT holds some great stocks. One of them is the best-known EV manufacturer which is very reliant on lithium: Tesla Inc.
#5 ARKQ – ARK Industrial Innovation ETF
The media has recently heaped scorn upon Cathie Wood, CEO of ARK Invest after she was Wall Street’s darling last year. The proof is ultimately not in the headlines, but in the Big Money buying. Here we can see clearly that Big Money loved ARKQ last year. The question is: when we see selling (red) should we worry?
The answer lies in which stocks the ETF holds. And ARKQ holds some great ones. One such outlier is Teradyne:
Let’s summarize here: the top 3 ETFs (IYR, BOTZ, and VDE) for July score well in terms of MAPsignals’ scores. That means Big Money has been pouring into them:
LIT and ARKQ however, rank lower on our list of ETFs. This is because of weak technicals. These weaker ETFs represent great potential bargains.
So, there we have the 5 best ETFs for July.
The Bottom Line
IYR, BOTZ, VDE, LIT, & ARKQ represent top ETFs for July 2021. Real Estate, Energy, and Robotics stocks have performed well lately, which should continue. Lithium has an interesting story too. Paying attention to the fundamental quality of ETF constituents is paramount.
To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com
Disclosure: the author holds long positions in TER in managed accounts, but no positions in IYR, BOTZ, VDE, LIT, ARKQ, PLD, ISRG, FANG, or TSLA at the time of publication.
Charts Source: www.mapsignals.com, FactSet, End of day data sourced from Tiingo.com