The month of August is in the books. For most Americans, Labor Day weekend signals the unofficial end of summer. For investors, it means turning the page to September - historically the worst month of the year for stocks.
Despite entering August on a three-month winning streak, the major indexes managed to close out the month in the green. The S&P 500 added 2.1%, while the Nasdaq 100 barely squeaked out a 1% gain, dragged down by a late-month pullback in the big tech leaders. Case in point: Nvidia (NVDA), the world’s largest publicly traded company, slipped 6% from its August all-time high.
But beneath the surface, there were some serious standouts.
Three Breakout ETFs in August
1. Roundhill Cannabis ETF (WEED)
Rumors are swirling that President Trump may reclassify cannabis from Schedule I to Schedule III - a shift that would dramatically change the landscape for the industry. The ETF soared in August, but let’s keep perspective: it’s still 67% below its 2022 high. A rally? Yes. A long-term winner? Probably not.
2. KraneShares SSE STAR Market 50 ETF (KSTR)
This China-based tech fund surged 30% last month, thanks in large part to Cambricon Technologies - a company I highlighted earlier this week and one I view as China’s version of Nvidia. The ETF holds the 50 largest names on the Shanghai Science and Innovation Technology Board. I’ll be honest, I don’t recognize many of the top holdings… which is exactly why it deserves more attention. China tech stocks remain undervalued, and this is a space I believe could deliver massive upside in the years ahead.
3. VanEck Rare Earth & Strategic Metals ETF (REMX)
Up 28% in August, REMX continues to ride a wave of renewed focus on critical minerals. If you’ve followed my work for any length of time, you know I’ve been bullish on rare earths for years. With Trump back in the White House and new executive orders aimed at boosting U.S. production, this sector is set up for a potential long-term rally.
My Take
Chasing short-term performance is never a strategy. But following the money - and layering in solid analysis - can uncover powerful long-term opportunities.
Cannabis stocks? Likely a short-lived move.
Chinese tech and rare earths? These are two megatrends with the tailwinds to keep outperforming for years.
Ignore them at your own risk.
Here’s to the future,
Matt McCall
Editor, Market Insights
