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Despite some volatility lately, performances for stocks have been pretty good to start 2013. The S&P 500 was up double digits through the first six months of the year, even with surging bond yields and concerns over the Fed’s tapering of bond purchases.
Yet while SPY's 14% return is certainly impressive—especially for just six months—this pales in comparison to what investors have seen in a few choice sectors. These market segments have risen roughly twice as much as what we have seen in the S&P 500 in the same time period, suggesting that these have been excellent picks for investors during this six month time frame (read 3 Top Ranked Mid Cap ETFs to Buy Now).
Plus, these sectors appear to be well-positioned in the second half of the year, as the trends that propelled the space higher to begin 2013 are still in place. For this reason, investors might want to take a closer look at the top performing ETFs in the best sectors below, as they could provide for some great ideas to close out 2013 as well.
Top Sectors and Top ETFs
In particular, the financials sector has been a strong performer. The space has been helped as of late by a steepening yield curve, and greater volatility in the markets which has assisted exchanges.
This has led to a great first half for the iShares Dow Jones US Broker-Dealers ETF (IAI - ETF report), as this fund has risen by 31% in the first six months of the year (read 3 Surging Financial ETFs Beating the Market).
Beyond financials, investors also saw some strength in the biotechnology world. This continues the incredible run for the sector, and comes on the back of strong M&A activity, as well as high levels of demand for new biotech drugs.
The top biotech ETF to start 2013 was the Market Vectors Biotech ETF (BBH - ETF report), which added about 34% to begin the year. The cap weighted product is also up over 100% in the past two year time frame, suggesting an incredibly strong history for BBH.
The real winner to start the year though has been the clean energy space. This segment has surged thanks to positive news out of the solar industry, as well as strength from a number of related companies like Tesla Motors which is more in the ‘clean tech’ sector.
While a number of funds have benefited from this trend, the biggest winner was the First Trust NASDAQ Clean Edge Green Tech ETF (QCLN - ETF report). This product added more than 55% to start 2013, possibly signaling that the space is finally back on track (see 3 ETFs to Buy for Obama’s Climate Change Plan).
As you can see, this group has handily outperformed the S&P 500 to start 2013, with gains in excess of 30% not uncommon. While it is certainly questionable if these ETFs can maintain this high level of outperformance to finish off 2013, there are certainly strong trends underpinning each of the aforementioned sectors.
For more on these top sectors and the some of the best ETFs in each, make sure to watch our short video on the subject below:
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