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The investing world has been witnessing tectonic shifts lately with improving global economic fundamentals. Investors’ sentiment is now not the same as it was just after the financial meltdown in 2008 (read: Why Are Active Fixed Income ETFs Flushing the Market?).
The scenario has also been changing in the ETF corner. Issuers are turning more innovative and intend to come up with products that are more dynamic and suit the current improving-but-volatile market conditions.
Earlier, the area used to be dominated by passively managed or index-tracking funds. Their low cost and transparent structure have made them highly coveted. On the other hand, active funds are arguably expensive as these involve research expenses associated with the manager’s due diligence and additional cost in the form of a wide bid/ask spread beyond the expense ratio. Still, there has been a surge of actively managed ETFs lately.
Below we highlight some top-performing active ETFs of 2017 that breezed past the S&P 500 (as of Dec 27, 2017) (read: Will Active ETFs Rule Ahead?).
The fund provides thematic exposure to all sectors of innovation. The securities in ARKK offer the best risk-reward opportunities from ARK’s innovation-based themes, while providing less volatility. The fund charges 75 bps in fees (read: 7 Biggest ETF Stories of 2017 to Continue in 2018).
The fund offers thematic multi-cap exposure to Internet technologies including cloud computing, digital media, e-commerce, bitcoin, and the Internet of Things (IoT). Bitcoin’s monstrous rally in 2017 has helped the fund. The fund charges 75 bps in fees(read: Top Sector ETFs of 2017).
The fund offers exposure to industrial elements including robotics (26%), autonomous vehicles (34%), energy storage (9%) and 3D printing (28%). It also charges 75 bps in fees. The fund captures long-term alpha with low correlation of relative returns to traditional growth strategies and negative correlation to value strategies.
The fund seeks long-term capital appreciation above international benchmarks such as the MSCI EAFE Index and the BNY Mellon Classic ADR Index. The fund focuses on relative investing. Relative strength investing involves buying securities that have appreciated in price more than others in their investment universe and holding them until they exhibit sell signals (read: Top Investing Areas of 2017 & Their Top ETFs).
This fund is linked to innovative elements including bio-informatics, bio-inspired computing, molecular medicine, and pharmaceutical innovations. Beyond DNA (19%), Gene Therapy (19%), Targeted Therapeutics (13%), Bioinformatics (12%) and Next Generation Oncology (12%) hold top five spots in the fund. The fund charges 75 bps in fees.
First Trust RiverFront Dynamic Emerging Markets ETF (RFEM - Free Report) – Up 33.9%
This is a 102-stock actively managed exchange-traded fund. The fund's investment objective is to provide capital appreciation. Under normal market conditions, the fund looks to achieve its objective by investing at least 80% of its net assets in a portfolio of equity securities of emerging market companies. The fund charges 95 bps in fees.
Rex Gold Hedged S&P 500 ETF– Up 33.0%
The fund joins the returns of the S&P 500 Index and gold futures contracts by tracking the S&P 500 Dynamic Gold Hedged Index. The fund charges 48 bps in fees.
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7 Top Active ETFs of 2017
The investing world has been witnessing tectonic shifts lately with improving global economic fundamentals. Investors’ sentiment is now not the same as it was just after the financial meltdown in 2008 (read: Why Are Active Fixed Income ETFs Flushing the Market?).
The scenario has also been changing in the ETF corner. Issuers are turning more innovative and intend to come up with products that are more dynamic and suit the current improving-but-volatile market conditions.
Earlier, the area used to be dominated by passively managed or index-tracking funds. Their low cost and transparent structure have made them highly coveted. On the other hand, active funds are arguably expensive as these involve research expenses associated with the manager’s due diligence and additional cost in the form of a wide bid/ask spread beyond the expense ratio. Still, there has been a surge of actively managed ETFs lately.
Below we highlight some top-performing active ETFs of 2017 that breezed past the S&P 500 (as of Dec 27, 2017) (read: Will Active ETFs Rule Ahead?).
ARK Innovation ETF (ARKK - Free Report) – Up 90.8%
The fund provides thematic exposure to all sectors of innovation. The securities in ARKK offer the best risk-reward opportunities from ARK’s innovation-based themes, while providing less volatility. The fund charges 75 bps in fees (read: 7 Biggest ETF Stories of 2017 to Continue in 2018).
ARK Web x.0 ETF (ARKW - Free Report) – Up 90.2%
The fund offers thematic multi-cap exposure to Internet technologies including cloud computing, digital media, e-commerce, bitcoin, and the Internet of Things (IoT). Bitcoin’s monstrous rally in 2017 has helped the fund. The fund charges 75 bps in fees(read: Top Sector ETFs of 2017).
ARK Industrial Innovation ETF (ARKQ - Free Report) – Up 54.1%
The fund offers exposure to industrial elements including robotics (26%), autonomous vehicles (34%), energy storage (9%) and 3D printing (28%). It also charges 75 bps in fees. The fund captures long-term alpha with low correlation of relative returns to traditional growth strategies and negative correlation to value strategies.
AdvisorShares Dorsey Wright ADR ETF (AADR - Free Report) – Up 47.5%
The fund seeks long-term capital appreciation above international benchmarks such as the MSCI EAFE Index and the BNY Mellon Classic ADR Index. The fund focuses on relative investing. Relative strength investing involves buying securities that have appreciated in price more than others in their investment universe and holding them until they exhibit sell signals (read: Top Investing Areas of 2017 & Their Top ETFs).
ARK Genomic Revolution Multi-Sector ETF (ARKG - Free Report) – Up 47.3%
This fund is linked to innovative elements including bio-informatics, bio-inspired computing, molecular medicine, and pharmaceutical innovations. Beyond DNA (19%), Gene Therapy (19%), Targeted Therapeutics (13%), Bioinformatics (12%) and Next Generation Oncology (12%) hold top five spots in the fund. The fund charges 75 bps in fees.
First Trust RiverFront Dynamic Emerging Markets ETF (RFEM - Free Report) – Up 33.9%
This is a 102-stock actively managed exchange-traded fund. The fund's investment objective is to provide capital appreciation. Under normal market conditions, the fund looks to achieve its objective by investing at least 80% of its net assets in a portfolio of equity securities of emerging market companies. The fund charges 95 bps in fees.
Rex Gold Hedged S&P 500 ETF– Up 33.0%
The fund joins the returns of the S&P 500 Index and gold futures contracts by tracking the S&P 500 Dynamic Gold Hedged Index. The fund charges 48 bps in fees.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>