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10 Top-Ranked ETFs That Have Outperformed in 2020

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The coronavirus outbreak notwithstanding, 2020 has been shaping up as a blockbuster year. The pandemic wreaked havoc on the economy and sent the markets into the bear territory in March. Then, super-easy monetary policies coupled with COVID-19 vaccine optimism led to a solid rebound. In fact, Wall Street has been on a historic rally with major indices hitting a series of new highs lately.

The Fed is expected to hold rates near zero and will continue the asset purchase program at the current rate until “substantial further progress” has been made toward reaching maximum employment and healthy inflation. Meanwhile, the rollout of vaccines to Americans bolstered investors’ confidence. A vaccine will end the pandemic crisis and set the stage for a speedy recovery, thereby boosting demand for several types of products and services in the economy (read: 5 ETFs to Buy as Fed Maintains Bond Buying).  

Additionally, the potential of a divided Congress with president-elect Biden is driving the stocks higher. The divided government is favorable for the economy, as there will be lesser chances of major tax increases and tighter regulations. Further, the prospect of further stimulus by the end of this year is adding to the strength.

While the winners have been broad-based, several ETFs have easily crushed the market by wide margins this year and have a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy). Below, we have presented a bunch of top-performing ETFs from different industries that are likely to continue outperforming, should the trends prevail.

Invesco Solar ETF (TAN - Free Report) – Up 201.9%

This ETF offers global exposure to 28 solar stocks by tracking the MAC Global Solar Energy Index. U.S. firms dominate the fund’s portfolio with nearly 46% share, followed by China (26.1%) and Germany (5.4%). The product has amassed $3 billion in its asset base and charges investors 71 basis points (bps) in fees per year. It has a Zacks ETF Rank #2.

WisdomTree Cloud Computing Fund (WCLD - Free Report) – Up 111.1%

This fund offers exposure to emerging, fast-growing U.S.-listed companies (including ADRs) primarily focused on cloud software and services, and follows the BVP Nasdaq Emerging Cloud Index. It holds 54 stocks in its basket and charges investors 45 bps in fees per year. The product has amassed $1.1 billion in its asset base and sports a Zacks ETF Rank #1.

SPDR S&P Internet ETF (XWEB - Free Report) – Up 94.5%

This product targets the Internet corner of the broad tech space and follows the S&P Internet Select Industry Index. With AUM of $61.3 million, the fund holds 46 stocks in its basket and charges 35 bps in annual fees. It carries a Zacks ETF Rank #2.

Invesco DWA Technology Momentum ETF (PTF - Free Report) – Up 82.7%

This fund follows the Dorsey Wright Technology Technical Leaders Index, and provides exposure to 37 companies that are showing relative strength (momentum). It has AUM of $334.7 million and charges 60 bps in annual fees. PTF has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

Global X Social Media Index ETF (SOCL - Free Report) – Up 78.3%

This fund provides investors access to social media companies around the world and has amassed $281.2 million in its asset base. It tracks the Solactive Social Media Total Return Index, holding 39 securities in the basket. The ETF charges 0.65% in annual fees and has a Zacks ETF Rank #2 (read: Global X Social Media ETF Hits a New 52-Week High).

SPDR S&P Semiconductor ETF (XSD - Free Report) – Up 57.1%

This fund targets the semiconductor corner of the broad technology sector and follows the S&P Semiconductor Select Industry Index. It holds 37 stocks in its portfolio with AUM of $789.5 million and expense ratio of 0.35%. The product has a Zacks ETF Rank #2 (read: Semiconductor ETFs Up At Least 40% in 2020: More Gains Ahead).

SPDR S&P Biotech ETF (XBI - Free Report) – Up 54.3%

With AUM of $7.1 billion, XBI provides equal-weight exposure across 139 biotechnology stocks by tracking the S&P Biotechnology Select Industry Index. It has 0.35% in expense ratio and carries a Zacks ETF Rank #2.

Vanguard Consumer Discretionary ETF (VCR - Free Report) – Up 47.5%

This fund offers exposure to the broad consumer discretionary sector and follows the MSCI US Investable Market Consumer Discretionary 25/50 Index. It holds 299 stocks in its basket and charges investors 10 bps in annual fees. The product manages an asset base of about $4.6 billion and has a Zacks ETF Rank #2 (read: 10 Top-Performing ETFs of the Past Decade).

Invesco QQQ (QQQ - Free Report) - Up 47.1%

This ETF provides exposure to the 103 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. It is one of the largest and most-popular ETFs in the large-cap space with AUM of $147.7 billion. The product charges investors 20 bps in annual fees and has a Zacks ETF Rank #1.

iShares Morningstar Mid-Cap Growth ETF – Up 45.9%

This product provides exposure to mid-sized U.S. companies whose earnings are expected to grow at an above-average rate relative to the market by tracking the Morningstar Mid Growth Index. It holds 161 stocks in its basket and has amassed $1.5 billion in its asset base. The fund charges 30 bps in annual fees and sports a Zacks ETF Rank #1.

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