November Turns S&P 500's Best Month in 2024: ETF Area Winners

Wall Street climbed to new record levels to close out November 2024. It was the best month of 2024 for the Dow Jones and the S&P 500 courtesy of optimism over potential tax cuts and a post-Presidential election rally triggered by Donald Trump’s victory.

The S&P 500, the Dow Jones and the Nasdaq recorded 5%, 6% and 7.5% gains in November. The Russell 2000, which focuses on small-cap stocks, outperformed with a monthly surge of 10.8%. Note that the year 2024 has been stellar for equities, with the S&P 500 up over 26%, putting it on track for its best performance since 2021.

The year has seen no market correction (a pullback of 10% or more). Historically, the S&P 500 averages a correction once every 346 days, but recent years have been stronger. Since 2000, half of all years have avoided corrections entirely, highlighting the resilience of the current bull market, per CNBC.

Market Sentiment Remains Bullish

“The prevailing takeaway from November, to me, is that what was true before the election has remained true after the election,” noted Ross Mayfield, investment strategist at Baird Private Wealth Management. He added that the bull market has strong momentum heading into December, buoyed by seasonal tailwinds and a post-election boost, as quoted on CNBC.

Interest Rate Expectations Bolster Optimism

Expectations for lower interest rates have further fueled the stock market rally. Fed funds futures now indicate a 66% probability of a 25-basis-point rate cut at the Federal Reserve’s policy meeting next month, according to CMEGroup’s FedWatch Tool.

Top-Performing ETFs in Focus

Against the above-mentioned backdrop, below we highlight a few winning exchange-traded fund (ETF) areas of the month of November.

Tesla-Heavy ETFs

The Tesla TSLA stock has risen 38.2% in the past month (as of Nov. 29, 2024). With potential benefits from Trump’s pro-manufacturing and deregulatory policies, Tesla seems uniquely positioned for growth. Its leadership position in the EV business should help it weather Trump’s promised abolition of EV tax credits (a move that is likely to hurt smaller players more).

Tesla CEO Elon Musk also joined the incoming administration to end government bureaucracy. Musk will be one of the heads of the Department of Government Efficiency (DOGE). Tesla shares take a 30% share of the Simplify Volt TSLA Revolution ETF VCAR (which was up about 69% in November), while the bullish Tesla ETF Direxion Daily TSLA Bull 2X Shares TSLL occupies 60% share of the fund VCAR. In fact, all Tesla-heavy ETFs rallied in November (read: Tesla ETFs Soar on Trump Win: Should You Buy, Hold or Sell?).

Bitcoin

iShares Bitcoin Trust ETF IBIT and VanEck Bitcoin ETF HODL each gained more than 38% in the past month. The cryptocurrency Bitcoin flirted with a price tag of $99K last month thanks to Trump’s proposed Bitcoin reserve and domestic mining focus.

Trump’s crypto-friendly stance to make the United States the crypto capital, the resignation of the current SEC chair and hopes for more deregulation turbocharged the entire cryptocurrency space in November. Options on BlackRock’s popular iShares Bitcoin Trust ETF IBIT also began trading in November (read: Bitcoin to Hit $2,00,000 in 2025? ETFs in Focus).

Space

ARK Space Exploration & Innovation ETF ARKX rose 24.5% past month. Shares of Rocket Lab USA RKLB, a key competitor to Elon Musk’s SpaceX, skyrocketed over 154% in November. The surge followed the release of the company’s third-quarter earnings, which surpassed expectations, and the announcement of a new contract with a commercial satellite constellation operator.

In any case, the space industry is thriving.  According to a report by McKinsey, the global space economy is estimated to reach a valuation of $1.8 trillion by 2035 (read: Space ETFs Soar on Rocket Lab's Q3 Earnings Beat and New Deal).

MLP

InfraCap MLP ETF AMZA jumped 19.6% past month.The artificial intelligence (AI) boom is driving up gas-pipeline stocks because AI applications, particularly in data centers, require vast amounts of electricity. Natural gas is emerging as a reliable energy source for these data centers. Pipeline operators benefit from this boom as they transport the fuel needed to power these centers.

MLPs catch investors’ eyes as these do not pay taxes at the entity level and are thus able to pay out most of their income (more than 90%) in the form of dividends like the REIT firms. AMZA ETF yields as high as 6.72% annually.

Cloud Computing

WisdomTree Cloud Computing Fund WCLD was up about 18.8% past month. Cloud computing has been at the forefront of the growth in technology for the past few years, offering efficient solutions to businesses and consumers (read: Cloud Computing ETFs That Won Past Month and Have More Room to Run).

The widespread adoption of remote work and e-commerce has continued to fuel the need for scalable and reliable cloud solutions. Moreover, advancements in cloud technologies, including AI, machine learning, and cybersecurity enhancements, have expanded the use cases for cloud services, attracting a broader customer base.

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