Santa Rally May Skip 2025: ETFs To Watch This December - Invesco QQQ Trust, Series 1 (NASDAQ:QQQ), iShares Expanded Tech-Software Sector ETF (BATS:IGV)

Core Insights - December's market behavior is expected to be more volatile than usual, contrasting with its historical trend of stability and comfort [1] - Investors are shifting focus towards downside protection, indicating a departure from traditional year-end optimism [2] Volatility ETFs - There is an increased interest in volatility-linked ETFs such as ProShares VIX Short-Term Futures ETF (BATS:VIXY), ProShares VIX Mid-Term Futures ETF (BATS:VIXM), and ProShares Ultra VIX Short-Term Futures ETF (BATS:UVXY) as investors seek protection against potential market downturns [2][3] Market Dynamics - The typical calm of December is disrupted by recent market shocks, including DeepSeek's collapse and unexpected tariffs, leading to a potential rise in volatility [3] - The momentum trade is showing signs of weakness, which may benefit equal-weight ETFs like Invesco S&P 500 Equal Weight ETF (NYSE:RSP) and defensive funds such as iShares MSCI USA Minimum Volatility Factor ETF (BATS:USMV) [4] Megacap Tech ETFs - Megacap technology stocks have caused significant market fluctuations, impacting tech-heavy ETFs like Invesco QQQ Trust (NASDAQ:QQQ) and iShares Semiconductor ETF (NASDAQ:SOXX), with AI-related uncertainties contributing to this volatility [5]