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10 Top-Ranked ETFs Leading the 10-Year Bull Run

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The U.S. bull market is now a decade old, rising from the depth of the financial crisis and the Great Recession despite a plethora of challenges. Worries about debt crisis, government shutdown, the Middle East conflict, geopolitical tension, Greece turmoil, China’s soft landing issues, Japan’s recession, a global slowdown, Brexit, the oil price carnage, and trade war between the United States and China have derailed the bulls (read: Growth Worries Resurface as Bulls Turn 10: 5 ETF Buying Zones).

The S&P 500 index has quadrupled, rallying more than 300%, from the bear-market bottom of 676.53 on Mar 9, 2009 — representing the longest bull market in history. However, it is not the strongest as stock prices in the 1990s bull market increased 417% at the peak, more than 100 percentage points above the current bull market.

The rally came with six corrections (a decline of 10% or more), the last witnessed in the beginning of December 2018. Cheap money flows and lower interest rates have been the biggest drivers of the longest bull market. Additionally, the United States emerged as a healthier economy dodging the financial crisis and the Great Recession, with GDP growth rising from a contraction of 5.7% seen in March 2009 to 2.9% in 2018, representing the second-strongest pace of the 10-year-old expansion. The unemployment rate has fallen to 3.8% currently from 10% in October 2009.

Further, Americans have an optimistic view of the economy with confidence hitting the highest level in more than 18 years though temporary headwinds like trade war and partial government shutdown have hit sentiments over the past few months.

Record stock buybacks and all-time high dividends also led to a spike in the stock market. Tax reforms passed by President Donald Trump and stronger corporate earnings have boosted the longevity of the bulls lately. Notably, the positives have cumulatively added around $21 trillion to the S&P 500 value. The trend is likely to continue for another year with major bourses showing strength on hopes of a trade deal, a dovish Fed and an improving Chinese economic health (read: 10-Year Bull Market to Rage Ahead in 2019: 10 ETF Bets).

While there have been winners in every corner of the space, several ETFs have easily crushed the market by wide margins. Below we have presented a bunch of top-performing ETFs of the 10-year bull market that will continue to outperform in the coming months given that these have a Zacks ETF Rank #1 (Strong Buy) or 2 (Buy).

First Trust Dow Jones Internet Index Fund (FDN - Free Report) – Up 844%

This fund targets the Internet corner of the broad technology space with AUM of $7.9 billion and average daily volume of around 831,000 shares. The fund follows the Dow Jones Internet Composite Index and holds 41 stocks in its basket. Expense ratio comes in at 0.53%. The product has a Zacks ETF Rank #2 with a High risk outlook (read: 4 Sector ETFs That Crushed S&P 500 in Decade-Old Bull Run).

First Trust NYSE Arca Biotechnology Index Fund (FBT - Free Report) – Up 679%

This fund follows the NYSE Arca Biotechnology Index, which measures the performance of companies in the biotechnology industry that are primarily involved in the use of biological processes to develop products or provide services. It holds about 30 securities in its basket and charges 56 bps in annual fees. It has accumulated $2.8 billion in its asset base and trades in a good volume of around 290,000 shares a day. FBT has a Zacks ETF Rank #2 with a High risk outlook.

Invesco Dynamic Software ETF – Up 580%

With AUM of $350.4 million, this ETF provides exposure to 30 software segments of the broader U.S. technology space. It follows the Dynamic Software Intellidex Index, which measures companies that are principally engaged in the research, design, production or distribution of products or processes that relate to software applications and systems and information-based services. The product charges 63 bps in annual fees and trades in average daily volume of 659,000 shares. The product has a Zacks ETF Rank #1 with a High risk outlook.

iShares Expanded Tech-Software Sector ETF (IGV - Free Report) – Up 568%

This ETF provides exposure to the software segment in the technology and communication services sectors by tracking the S&P North American Expanded Technology Software Index. Holding a basket of 90 securities, the fund charges 47 bps in annual fees and has AUM of $2.5 billion. Volume is good as it exchanges around 491,000 shares a day. IGV has a Zacks ETF Rank #1 with a High risk outlook (read: Top-Ranked ETF Winners in Dow's Longest Rally in 24 Years).

iShares U.S. Aerospace & Defense ETF (ITA - Free Report) – Up 547%

This fund offers exposure to 35 U.S. companies that manufacture commercial and military aircraft and other defense equipment. It follows the Dow Jones U.S. Select Aerospace & Defense Index and charges 43 bps in fees per year. The fund has accumulated $5.1 billion in AUM and trades in good volume of around 333,000 shares. It has a Zacks ETF Rank #2 with a Medium risk outlook.

iShares U.S. Medical Devices ETF (IHI - Free Report) – Up 527%

The fund provides exposure to U.S. companies that manufacture and distribute medical devices by tracking the Dow Jones U.S. Select Medical Equipment Index. In total, the fund holds 56 securities in its basket with AUM of $3.2 billion. It trades in good average daily volume of 230,000 shares and charges 43 bps in fees per year. The fund has a Zacks ETF Rank #2 with a Medium risk outlook.

First Trust Technology AlphaDEX Fund (FXL - Free Report) – Up 513%

This fund offers exposure to the broad technology sector using the AlphaDEX methodology. In total, it holds 91 securities in its basket with AUM of $2 billion. The ETF trades in good average daily volume of 324,000 shares and charges 63 bps in fees per year. It has a Zacks ETF Rank #1 with a Medium risk outlook (read: 5 ETFs You Can't Help Falling in Love With).

iShares Expanded Tech Sector ETF (IGM - Free Report) – Up 500%

This ETF tracks the S&P North American Expanded Technology Sector Index, giving investors exposure to the technology sector, and technology-related companies in the communication services and consumer discretionary sectors. The fund has AUM of $1.5 billion and charges 47 bps in annual fees. It trades in a moderate volume of nearly 96,000 shares in hand a day and has a Zacks ETF Rank #2 with a Medium risk outlook.

Vanguard Consumer Discretionary ETF (VCR - Free Report) – Up 497%

This fund targets the consumer discretionary sector and follows the MSCI U.S. Investable Market Consumer Discretionary 25/50 Index. It holds 304 stocks in its basket with AUM of $2.7 billion. VCR is a low choice in the space, charging just 10 bps in annual fees, while volume is moderate at nearly 127,000 shares a day. The product has a Zacks ETF Rank #2 with a Medium risk outlook.

Invesco QQQ (QQQ) – Up 496%

This ETF tracks the Nasdaq-100 Index and provides exposure to the largest domestic and international nonfinancial companies listed on the Nasdaq Stock Market based on market capitalization. It is home to 103 stocks and has AUM of $66 billion. The product charges 20 bps in annual fees and trades in average daily volume of 52.5 million shares. It has a Zacks ETF Rank #1 with a Medium risk outlook (read: 5 Top-Performing Stocks in Nasdaq ETF).

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