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Wall Street has been upbeat in January. The S&P 500 has advanced 3.5% so far this month, the Dow Jones has gained 5.9% and the Nasdaq Composite has added 2.1%. The tech-heavy Nasdaq has been hit hard by the DeepSeek rout at the end of the month.
Below, we highlight the key events that shaped the markets and economic landscape in January.
DeepSeek Rout
DeepSeek, a Chinese startup developing AI models, grabbed headlines with the release of its new R1 model in late January. According to Yahoo Finance, the company revealed that training the R1 model cost just $5.6 million, significantly less compared to the $100 million required to train OpenAI's GPT-4 model.
A self-imposed Feb. 1 deadline set by Donald Trump for implementing a new round of tariffs on Canada, Mexico and China is knocking at the door. As the deadline nears, economic analysts and world leaders scramble to prepare for potential impacts amid growing uncertainty. On Thursday afternoon, Trump reiterated his commitment to imposing a 25% tariff on imports from Mexico and Canada.
Fed Keeps Rates Steady
In the January meeting, the Federal Reserve has opted to hold interest rates steady at 4.25% to 4.5%, signaling a cautious stance on further reductions. This decision reflects lingering inflation concerns and uncertainty surrounding President Donald Trump’s economic policies, particularly on trade and immigration.
With no immediate plans for additional rate cuts, the Fed appears to be adopting a wait-and-see approach, closely monitoring inflation trends and awaiting further specification on how Trump’s policies will shape the economy.
Bank of Japan Raises Policy Rate
The Bank of Japan (BOJ) increased its policy rate by 25 basis points to 0.5% on Jan. 24, 2025, marking the highest level since 2008. This decision aligns with a CNBC survey conducted from Jan. 15-20, which revealed that most economists anticipated the hike as part of the central bank's efforts to normalize monetary policy. The yen was on track for its best monthly start to the year since 2018 on Friday, due to a hawkish BoJ (read: Bank of Japan Raises Policy Rate to 0.5%: ETFs in Focus).
Upbeat Bank Earnings
The latest quarterly results from America's major banks acted as a crucial thing as investors can assess the current economic condition from these very releases. The financial sector, which accounts for around one-fifth of the S&P 500 Index, had an upbeat Q4. All six big U.S. banks were able to beat overall this reporting season (read: ETFs to Play Upbeat Bank Earnings).
Top-Performing ETFs in Focus
Against this backdrop, below we highlight a few winning exchange-traded funds (ETFs) of January.
AdvisorShares Psychedelics ETF (PSIL - Free Report) – Up 17.4%
The AdvisorShares Psychedelics ETF is an actively managed ETF that seeks long-term capital appreciation by investing at least 80% of its net assets in securities of companies that derive at least 50% of their net revenues from or devote 50% of their assets to psychedelic drugs and derivatives that have economic characteristics similar to such securities. The ETF charges 99 bps in fees and yields 1.31% annually.
As gold prices are off to a great start in 2025, gold mining stocks and ETFs that act as leveraged plays of the underlying metal, have soared. The underlying Solactive Global Pure Gold Miners Index provides exposure to companies that are active in the gold mining industry and is denominated in U.S. dollars. The ETF charges 35 bps in fees.
KraneShares European Carbon Allowance Strategy ETF (KEUA - Free Report) – Up 16.2%
The KraneShares European Carbon Allowance Strategy ETF seeks to track the S&P Carbon Credit EUA Index. The ETF charges 82 bps in fees and yields 6.77% annually.
Bitcoin prices gained 11.3% in January on Trump bump while gold ETF GLD jumped 5.2%. The STKD Bitcoin & Gold ETF seeks to provide exposure to two prominent asset classes Bitcoin and gold. The expense ratio of the ETF is 1.00%. The fund yields 0.16% annually.
Global X MSCI Colombia ETF (GXG - Free Report) – Up 13.7%
The main stock market index in Colombia (COLCAP) increased 11.85% since the beginning of 2025. The underlying MSCI All Colombia Select 25/50 Index of the fund GXG is designed to represent the performance of the Broad Colombian Equity Universe, while including constituents with minimum level of liquidity and applying the MSCI 25/50 Indexes methodology. The ETF charges 63 bps in fees and yields 5.39% annually.
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5 Best-Performing ETFs of January
Wall Street has been upbeat in January. The S&P 500 has advanced 3.5% so far this month, the Dow Jones has gained 5.9% and the Nasdaq Composite has added 2.1%. The tech-heavy Nasdaq has been hit hard by the DeepSeek rout at the end of the month.
Below, we highlight the key events that shaped the markets and economic landscape in January.
DeepSeek Rout
DeepSeek, a Chinese startup developing AI models, grabbed headlines with the release of its new R1 model in late January. According to Yahoo Finance, the company revealed that training the R1 model cost just $5.6 million, significantly less compared to the $100 million required to train OpenAI's GPT-4 model.
This raises important questions about AI investment and the potential rise of more cost-efficient artificial intelligence agents, which could disrupt the current market dynamics (read: Will 2025 See Slowing AI Investments in Big Tech? ETFs in Focus).
Trump Tariffs
A self-imposed Feb. 1 deadline set by Donald Trump for implementing a new round of tariffs on Canada, Mexico and China is knocking at the door. As the deadline nears, economic analysts and world leaders scramble to prepare for potential impacts amid growing uncertainty. On Thursday afternoon, Trump reiterated his commitment to imposing a 25% tariff on imports from Mexico and Canada.
Fed Keeps Rates Steady
In the January meeting, the Federal Reserve has opted to hold interest rates steady at 4.25% to 4.5%, signaling a cautious stance on further reductions. This decision reflects lingering inflation concerns and uncertainty surrounding President Donald Trump’s economic policies, particularly on trade and immigration.
With no immediate plans for additional rate cuts, the Fed appears to be adopting a wait-and-see approach, closely monitoring inflation trends and awaiting further specification on how Trump’s policies will shape the economy.
Bank of Japan Raises Policy Rate
The Bank of Japan (BOJ) increased its policy rate by 25 basis points to 0.5% on Jan. 24, 2025, marking the highest level since 2008. This decision aligns with a CNBC survey conducted from Jan. 15-20, which revealed that most economists anticipated the hike as part of the central bank's efforts to normalize monetary policy. The yen was on track for its best monthly start to the year since 2018 on Friday, due to a hawkish BoJ (read: Bank of Japan Raises Policy Rate to 0.5%: ETFs in Focus).
Upbeat Bank Earnings
The latest quarterly results from America's major banks acted as a crucial thing as investors can assess the current economic condition from these very releases. The financial sector, which accounts for around one-fifth of the S&P 500 Index, had an upbeat Q4. All six big U.S. banks were able to beat overall this reporting season (read: ETFs to Play Upbeat Bank Earnings).
Top-Performing ETFs in Focus
Against this backdrop, below we highlight a few winning exchange-traded funds (ETFs) of January.
AdvisorShares Psychedelics ETF (PSIL - Free Report) – Up 17.4%
The AdvisorShares Psychedelics ETF is an actively managed ETF that seeks long-term capital appreciation by investing at least 80% of its net assets in securities of companies that derive at least 50% of their net revenues from or devote 50% of their assets to psychedelic drugs and derivatives that have economic characteristics similar to such securities. The ETF charges 99 bps in fees and yields 1.31% annually.
Themes Gold Miners ETF (AUMI - Free Report) – Up 16.7%
As gold prices are off to a great start in 2025, gold mining stocks and ETFs that act as leveraged plays of the underlying metal, have soared. The underlying Solactive Global Pure Gold Miners Index provides exposure to companies that are active in the gold mining industry and is denominated in U.S. dollars. The ETF charges 35 bps in fees.
KraneShares European Carbon Allowance Strategy ETF (KEUA - Free Report) – Up 16.2%
The KraneShares European Carbon Allowance Strategy ETF seeks to track the S&P Carbon Credit EUA Index. The ETF charges 82 bps in fees and yields 6.77% annually.
STKD Bitcoin & Gold ETF (BTGD - Free Report) – Up 15%
Bitcoin prices gained 11.3% in January on Trump bump while gold ETF GLD jumped 5.2%. The STKD Bitcoin & Gold ETF seeks to provide exposure to two prominent asset classes Bitcoin and gold. The expense ratio of the ETF is 1.00%. The fund yields 0.16% annually.
Global X MSCI Colombia ETF (GXG - Free Report) – Up 13.7%
The main stock market index in Colombia (COLCAP) increased 11.85% since the beginning of 2025. The underlying MSCI All Colombia Select 25/50 Index of the fund GXG is designed to represent the performance of the Broad Colombian Equity Universe, while including constituents with minimum level of liquidity and applying the MSCI 25/50 Indexes methodology. The ETF charges 63 bps in fees and yields 5.39% annually.