Plus, how 23 other ETFs perform in August
A theme we like to address often is the best and worst-performing stocks of the new month. We covered the best FAANG stock for August, as well as a pharma stock to avoid. Now we're shifting gears to exchange traded funds (ETFs), and which ones, if past is precedent, could enjoy some August seasonality.
According to data from Schaeffer's Senior Quantitative Analyst Rocky White, over the last 10 years, iShares Silver Trust (SLV) and SPDR Gold Shares (GLD) are two of the best ETFs to target in August, based on average returns. SLV boasts an average return of 4.9%, with six of the 10 returns positive, while GLD's average return comes in at 3.3%, with 70% of the returns positive.
The mining sector has been a hot-button topic the last 12 months, especially as gold prices fluctuate, and the prospects of an infrastructure deal offer potential tailwinds. At last check, SLV was sitting at $23.40, down 4.7% year-to date. Amid the recent pullback, the 320-day moving average has stepped up as support. GLD, meanwhile, was last seen trading at $168.61, down 5% year-to-date with resistance looming at its 320-day moving average.
Now looks to be a good time to bet on both ETF's with options. Right now SLV and GLD boast a Schaeffer's Volatility Scorecard (SVS) of 77 and 84, respectively. In simpler terms, both ETF's have tended to exceed option traders' volatility expectations during the past year, a boon for prospective option buyers.