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Putting Up the ETF Tree of Wealth to Brighten 2024
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Christmas celebrations are incomplete without the Christmas tree, a symbol of goodwill and love with all the shining lights and silver bells, bringing joy and glee to every heart. Given its significance in this season of joy, we have built a tree with the most verdant ETFs of 2023 that could stand tall in 2024.
The Tree is Ready!
Let’s build the base first, which is the most valuable part and, of course, the place where all gifts are to be found. There’s nothing more fitting than the broad market ETF SPDR S&P 500 (SPY - Free Report) , which tracks the major U.S. benchmark — the S&P 500 Index — to give a solid foundation to our tree. The index has been hitting a series of new 2023 highs and is heading toward the longest weekly winning streak since 2017. The S&P 500 is up 23.6% this year. Speculation that the Fed is done with interest rate hikes and a surge in tech stocks have been the major catalysts.
Broad market sentiments have turned extremely bullish following the Fed’s dovish tone. The central bank, in its latest meeting, kept interest rates steady for the third time and penciled in three rate cuts of 75 bps for 2024. Lower interest rates generally lead to reduced borrowing costs, which can stimulate economic growth. This can positively impact sectors like real estate, consumer discretionary and financial services, which are typically sensitive to interest rate changes (read: Sector ETFs to Benefit From Fed Rate Cut Talks).
So, it makes sense to add the top-ranked ETFs from these sectors to our Christmas tree. Zacks Rank #2 (Buy) Real Estate Select Sector SPDR ETF (XLRE - Free Report) and Zacks Rank #1 (Strong Buy) Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) could form the fronds of the tree. Real Estate Select Sector SPDR ETF targets the real estate sector of the S&P 500 Index, while Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space.
For the top layer, we have chosen iShares Russell 2000 ETF (IWM - Free Report) as small caps are expected to outperform heading into the New Year with the economy on track for strong growth. Additionally, a low interest rate bodes well for small-cap stocks as it perks up economic activities and results in higher spending, thus boosting domestically focused companies. IWM is up about 10% over the past month and has a Zacks ETF Rank #2
At the very top is the star ETF of 2023 — Valkyrie Bitcoin Miners ETF (WGMI - Free Report) – which has nearly tripled this year. It is an actively managed ETF, providing exposure to the Bitcoin mining industry. WGMI invests at least 80% of its net assets (plus borrowings for investment purposes) in securities of companies that derive at least 50% of their revenues or profits from bitcoin mining operations and/or from providing specialized chips, hardware and software or other services to companies engaged in bitcoin mining (read: Bitcoin Miner ETF Tops in 2023: 5 Best Stocks).
Decoration
With the structure ready, we now have to decorate the tree with bells, candies and lights. While most of the ETFs could be part of this beautification, we have chosen those that have a top Zacks ETF Rank or are currently hot in the market. Notably, MicroSectors FANG+ ETN (FNGS - Free Report) will add to the glitter and shine.
Big tech stocks reclaimed their position as the market’s leaders this year and make up for about 30% of the S&P 500. In particular, “Magnificent Seven” stocks have been on the hot run this year, having gained more than 100% on average, far outpacing the broader market. The artificial intelligence boom, easing inflation and the Fed’s monetary policy shift will continue to fuel the tech sector in 2024 as well.
The best ETF that could nicely fit the candy decor is Vanguard Growth ETF (VUG - Free Report) . Growth investing is a momentum play and tends to outperform in a trending market (a market characterized by a prolonged uptrend). Growth stocks refer to high-quality stocks that are likely to witness revenue and earnings increase at a faster rate than the industry average. These stocks harness their momentum in earnings to create a positive bias in the market, resulting in rocketing share prices. VUG has climbed 45.1% this year and has a Zacks ETF Rank #2. So, growth ETFs seem excellent plays for investors seeking broad market exposure in 2024 (read: Top Growth ETFs to Tap Declining Inflation Trends).
Now, to light up the tree, let’s add gold ETFs like SPDR Gold Trust ETF (GLD - Free Report) that will continue to brighten investors’ portfolios in 2024. The bullion recently touched an all-time high, topping $2,100 per ounce, and is expected to increase further. A potential shift in monetary policy presents an intriguing scenario for investors. The Fed has indicated a possible end to its rate-hiking cycle, with expectations of lower borrowing costs in 2024. With AUM of $57 billion and an expense ratio of 0.40%, GLD has a Zacks ETF Rank #3 (Hold).
The Christmas tree of ETFs to brighten 2024 is now ready for investors. May it spread cheer!
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Putting Up the ETF Tree of Wealth to Brighten 2024
Christmas celebrations are incomplete without the Christmas tree, a symbol of goodwill and love with all the shining lights and silver bells, bringing joy and glee to every heart. Given its significance in this season of joy, we have built a tree with the most verdant ETFs of 2023 that could stand tall in 2024.
The Tree is Ready!
Let’s build the base first, which is the most valuable part and, of course, the place where all gifts are to be found. There’s nothing more fitting than the broad market ETF SPDR S&P 500 (SPY - Free Report) , which tracks the major U.S. benchmark — the S&P 500 Index — to give a solid foundation to our tree. The index has been hitting a series of new 2023 highs and is heading toward the longest weekly winning streak since 2017. The S&P 500 is up 23.6% this year. Speculation that the Fed is done with interest rate hikes and a surge in tech stocks have been the major catalysts.
Broad market sentiments have turned extremely bullish following the Fed’s dovish tone. The central bank, in its latest meeting, kept interest rates steady for the third time and penciled in three rate cuts of 75 bps for 2024. Lower interest rates generally lead to reduced borrowing costs, which can stimulate economic growth. This can positively impact sectors like real estate, consumer discretionary and financial services, which are typically sensitive to interest rate changes (read: Sector ETFs to Benefit From Fed Rate Cut Talks).
So, it makes sense to add the top-ranked ETFs from these sectors to our Christmas tree. Zacks Rank #2 (Buy) Real Estate Select Sector SPDR ETF (XLRE - Free Report) and Zacks Rank #1 (Strong Buy) Consumer Discretionary Select Sector SPDR Fund (XLY - Free Report) could form the fronds of the tree. Real Estate Select Sector SPDR ETF targets the real estate sector of the S&P 500 Index, while Consumer Discretionary Select Sector SPDR Fund offers exposure to the broad consumer discretionary space.
For the top layer, we have chosen iShares Russell 2000 ETF (IWM - Free Report) as small caps are expected to outperform heading into the New Year with the economy on track for strong growth. Additionally, a low interest rate bodes well for small-cap stocks as it perks up economic activities and results in higher spending, thus boosting domestically focused companies. IWM is up about 10% over the past month and has a Zacks ETF Rank #2
At the very top is the star ETF of 2023 — Valkyrie Bitcoin Miners ETF (WGMI - Free Report) – which has nearly tripled this year. It is an actively managed ETF, providing exposure to the Bitcoin mining industry. WGMI invests at least 80% of its net assets (plus borrowings for investment purposes) in securities of companies that derive at least 50% of their revenues or profits from bitcoin mining operations and/or from providing specialized chips, hardware and software or other services to companies engaged in bitcoin mining (read: Bitcoin Miner ETF Tops in 2023: 5 Best Stocks).
Decoration
With the structure ready, we now have to decorate the tree with bells, candies and lights. While most of the ETFs could be part of this beautification, we have chosen those that have a top Zacks ETF Rank or are currently hot in the market. Notably, MicroSectors FANG+ ETN (FNGS - Free Report) will add to the glitter and shine.
Big tech stocks reclaimed their position as the market’s leaders this year and make up for about 30% of the S&P 500. In particular, “Magnificent Seven” stocks have been on the hot run this year, having gained more than 100% on average, far outpacing the broader market. The artificial intelligence boom, easing inflation and the Fed’s monetary policy shift will continue to fuel the tech sector in 2024 as well.
The best ETF that could nicely fit the candy decor is Vanguard Growth ETF (VUG - Free Report) . Growth investing is a momentum play and tends to outperform in a trending market (a market characterized by a prolonged uptrend). Growth stocks refer to high-quality stocks that are likely to witness revenue and earnings increase at a faster rate than the industry average. These stocks harness their momentum in earnings to create a positive bias in the market, resulting in rocketing share prices. VUG has climbed 45.1% this year and has a Zacks ETF Rank #2. So, growth ETFs seem excellent plays for investors seeking broad market exposure in 2024 (read: Top Growth ETFs to Tap Declining Inflation Trends).
Now, to light up the tree, let’s add gold ETFs like SPDR Gold Trust ETF (GLD - Free Report) that will continue to brighten investors’ portfolios in 2024. The bullion recently touched an all-time high, topping $2,100 per ounce, and is expected to increase further. A potential shift in monetary policy presents an intriguing scenario for investors. The Fed has indicated a possible end to its rate-hiking cycle, with expectations of lower borrowing costs in 2024. With AUM of $57 billion and an expense ratio of 0.40%, GLD has a Zacks ETF Rank #3 (Hold).
The Christmas tree of ETFs to brighten 2024 is now ready for investors. May it spread cheer!