ETF Winners and Losers: Election Edition

Following Donald Trump’s victory in the 2024 US presidential election, exchange-traded funds that hold bank stocks and bitcoin soared, while solar and commodity ETFs fell.

Stocks rose Wednesday, with the Morningstar US Market Index up 3.9%. Small-cap stocks, which have underperformed in 2024, rose even more, with the Morningstar US Small Cap Index gaining 5.5%.

Election Winners

Financials rose the most out of the 11 major stock sectors, with the $44 billion Financial Select Sector SPDR ETF XLF up 5.9%. The gains were driven by bank stocks. The $3.4 billion SPDR S&P Regional Banking ETF KRE rose 8.24% and the big-bank dominated $2.1 billion SPDR S&P Bank ETF KBE rose 12.4%.

Bitcoin also won big. The $30 billion iShares Bitcoin Trust ETF IBIT rose 14.2% Wednesday. Trump embraced cryptocurrencies broadly and bitcoin specifically during the presidential race—for example, proposing cryptocurrency could be used to pay off the national debt.

The second- and third-best-performing sectors were industrials and energy, with the $20 billion Industrial Select Sector SPDR ETF XLI and the $35 billion Energy Select Sector SPDR ETF XLE both rising 3.9%.

Small caps were another big winner, with the $70 billion iShares Russell 2000 ETF IWM up 5.49%, beating the large cap $597 billion SPDR S&P 500 ETF Trust SPY, which only rose 2.4%.

Election Losers

Solar stocks were among the clearest market losers following the election. The $1.1 billion Invesco Solar ETF TAN fell 10.9% Wednesday.

The worst-performing sector was the rate-sensitive real estate sector, with the $8 billion Real Estate Select Sector SPDR XLRE falling 3.4%, followed by the $17 billion Consumer Staples Select Sector SPDR XLP, which fell 1.6%, and the $18 billion Utilities Select Sector SPDR ETF XLU, which dropped by 0.77%. These are all defensive, dividend-oriented sectors, which often benefit from falling rates. On Wednesday, bond yields rose following Trump’s victory.

Commodity stocks also saw weakness, with the $0.2 billion United States Copper Index ETF CPER down 4.6% and the $78 billion SPDR Gold Shares ETF GLD losing 2.8% as the ICE US Dollar Index rose 1.6%, making those commodities more expensive for buyers around the world.