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Top-Ranked ETFs That Are Up At Least 25% So Far This Year
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After enjoying a huge rally for most of the year, Wall Street was caught in wild trading in the recent weeks thanks to the spread of the Delta variant of COVID-19, inflation fears, prospects of tightening policies, budget wrangling in Washington and slowing growth in China.
U.S. Federal Reserve policymakers last week projected that they are ready to raise rates in 2022 and that the bank is likely to begin reducing its monthly bond purchases as soon as November. Meanwhile, the Fed warned of higher inflation that will likely remain in the coming months. The Chinese regulatory crackdown as well as concerns over the financial contagion due to the potential failure of China’s Evergrande property group added to the chaos (read: 5 Inverse ETFs Jump Most on Market Sell-Off).
However, the biggest vaccination drive, expanded stimulus and resumption of corporate earnings growth have been major catalysts driving the market higher. The recovering job market as well as reopening economies and businesses also added to the strength. The combination of all the factors led to a pent-up demand, resulting in higher demand for all types of products and services in the economy.
While the stock market gains have been broad-based, several ETFs have easily crushed the market by wide margins so far 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.
First Trust ISE-Revere Natural Gas Index Fund (FCG - Free Report) – Up 92.8%
Natural gas is surging on tightening supplies and low inventories, providing an upside to the natural gas stocks and ETFs. FCG offers exposure to U.S. companies involved in the exploration and production of natural gas. It follows the ISE-REVERE Natural Gas Index and holds 40 stocks in its basket. The fund has amassed $345.4 million in its asset base while charging 60 bps in annual fees. The product has a Zacks ETF Rank #2 with a High risk outlook (read: Best Performing Stocks of the Top US ETF of September).
With the vaccination of millions of Americans and the economy reopening, consumers are feeling more optimistic about the economy, leading to increased spending. With AUM of $1.2 billion, this product targets the broad retail sector by tracking the S&P Retail Select Industry Index. It holds 108 securities in its basket with key holdings in the Internet & direct marketing retail, apparel retail, automotive retail, and specialty stores. The fund charges 35 bps in annual fees and has a Zacks ETF Rank #1 with a Medium risk outlook.
The consumer discretionary sector is seeing a smooth ride on improving economy and rising spending. The upcoming holiday season will also provide boost to this sector. The fund targets the small-cap segment of the broad consumer discretionary space by tracking the S&P SmallCap 600 Capped Consumer Discretionary Index. It holds 88 securities in its basket with specialty retail taking the largest share at 32.4% while household durables, and hotels restaurants and leisure account for a double-digit exposure each. The product has attracted $63 million in AUM and charges 29 bps in annual fees. It has a Zacks ETF Rank #2 with a High risk outlook (read: 5 Top-Ranked ETFs to Buy on the Dip).
The financial sector has benefited from the rise in yields. This is because the steepening yield curve would bolster profits for banks, insurance companies and discount brokerage firms. With AUM of $11.2 billion, this fund provides exposure to a basket of 396 stocks by tracking the MSCI US Investable Market Financials 25/50 Index. Diversified banks account for 23.6% of the portfolio, followed by regional banks (14%), asset management & custody banks (10.2%) and investment banking & brokerage (9%). The product charges 10 bps in annual fees and has a Zacks ETF Rank #1 with a Medium risk outlook.
Vanguard S&P Small-Cap 600 Value ETF (VIOV - Free Report) – Up 25.2%
As small-cap companies are more domestically tied, these are poised to outperform when the economy improves. These pint-sized stocks generate most of their revenues from the domestic market, making them great choices during an uptrend. This ETF follows the S&P Small-Cap 600 Value Index, which is composed of the value companies in the S&P 600. It holds 479 securities in its basket with key holdings in financials, industrials and consumer discretionary. The fund has amassed $1.3 billion in its asset base and charges 15 bps in annual fees. It has a Zacks ETF Rank #2 with a Medium risk outlook.
The housing market has been on a tear buoyed by lower mortgage rates, skyrocketing demand and limited supplies. The thirst for home buying is rising even in the face of increasing housing prices, thus providing huge profits to homebuilders. This ETF provides exposure to homebuilders with a well-diversified exposure across building products, home furnishing, home improvement retail, home furnishing retail and household appliances. It is the most-popular option in the homebuilding space with AUM of $1.8 billion and charges 35 bps in annual fees. The product has a Zacks ETF Rank #2 with a High risk outlook.
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Top-Ranked ETFs That Are Up At Least 25% So Far This Year
After enjoying a huge rally for most of the year, Wall Street was caught in wild trading in the recent weeks thanks to the spread of the Delta variant of COVID-19, inflation fears, prospects of tightening policies, budget wrangling in Washington and slowing growth in China.
U.S. Federal Reserve policymakers last week projected that they are ready to raise rates in 2022 and that the bank is likely to begin reducing its monthly bond purchases as soon as November. Meanwhile, the Fed warned of higher inflation that will likely remain in the coming months. The Chinese regulatory crackdown as well as concerns over the financial contagion due to the potential failure of China’s Evergrande property group added to the chaos (read: 5 Inverse ETFs Jump Most on Market Sell-Off).
However, the biggest vaccination drive, expanded stimulus and resumption of corporate earnings growth have been major catalysts driving the market higher. The recovering job market as well as reopening economies and businesses also added to the strength. The combination of all the factors led to a pent-up demand, resulting in higher demand for all types of products and services in the economy.
While the stock market gains have been broad-based, several ETFs have easily crushed the market by wide margins so far 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.
First Trust ISE-Revere Natural Gas Index Fund (FCG - Free Report) – Up 92.8%
Natural gas is surging on tightening supplies and low inventories, providing an upside to the natural gas stocks and ETFs. FCG offers exposure to U.S. companies involved in the exploration and production of natural gas. It follows the ISE-REVERE Natural Gas Index and holds 40 stocks in its basket. The fund has amassed $345.4 million in its asset base while charging 60 bps in annual fees. The product has a Zacks ETF Rank #2 with a High risk outlook (read: Best Performing Stocks of the Top US ETF of September).
SPDR S&P Retail ETF (XRT - Free Report) – Up 41.1%
With the vaccination of millions of Americans and the economy reopening, consumers are feeling more optimistic about the economy, leading to increased spending. With AUM of $1.2 billion, this product targets the broad retail sector by tracking the S&P Retail Select Industry Index. It holds 108 securities in its basket with key holdings in the Internet & direct marketing retail, apparel retail, automotive retail, and specialty stores. The fund charges 35 bps in annual fees and has a Zacks ETF Rank #1 with a Medium risk outlook.
Invesco S&P SmallCap Consumer Discretionary ETF (PSCD - Free Report) – Up 32.6%
The consumer discretionary sector is seeing a smooth ride on improving economy and rising spending. The upcoming holiday season will also provide boost to this sector. The fund targets the small-cap segment of the broad consumer discretionary space by tracking the S&P SmallCap 600 Capped Consumer Discretionary Index. It holds 88 securities in its basket with specialty retail taking the largest share at 32.4% while household durables, and hotels restaurants and leisure account for a double-digit exposure each. The product has attracted $63 million in AUM and charges 29 bps in annual fees. It has a Zacks ETF Rank #2 with a High risk outlook (read: 5 Top-Ranked ETFs to Buy on the Dip).
Vanguard Financials ETF (VFH - Free Report) – Up 29%
The financial sector has benefited from the rise in yields. This is because the steepening yield curve would bolster profits for banks, insurance companies and discount brokerage firms. With AUM of $11.2 billion, this fund provides exposure to a basket of 396 stocks by tracking the MSCI US Investable Market Financials 25/50 Index. Diversified banks account for 23.6% of the portfolio, followed by regional banks (14%), asset management & custody banks (10.2%) and investment banking & brokerage (9%). The product charges 10 bps in annual fees and has a Zacks ETF Rank #1 with a Medium risk outlook.
Vanguard S&P Small-Cap 600 Value ETF (VIOV - Free Report) – Up 25.2%
As small-cap companies are more domestically tied, these are poised to outperform when the economy improves. These pint-sized stocks generate most of their revenues from the domestic market, making them great choices during an uptrend. This ETF follows the S&P Small-Cap 600 Value Index, which is composed of the value companies in the S&P 600. It holds 479 securities in its basket with key holdings in financials, industrials and consumer discretionary. The fund has amassed $1.3 billion in its asset base and charges 15 bps in annual fees. It has a Zacks ETF Rank #2 with a Medium risk outlook.
SPDR S&P Homebuilders ETF (XHB - Free Report) – Up 25%
The housing market has been on a tear buoyed by lower mortgage rates, skyrocketing demand and limited supplies. The thirst for home buying is rising even in the face of increasing housing prices, thus providing huge profits to homebuilders. This ETF provides exposure to homebuilders with a well-diversified exposure across building products, home furnishing, home improvement retail, home furnishing retail and household appliances. It is the most-popular option in the homebuilding space with AUM of $1.8 billion and charges 35 bps in annual fees. The product has a Zacks ETF Rank #2 with a High risk outlook.