The Wall Street has witnessed a spectacular run this year, braving all the woes including recession fears, geopolitical tensions, U.S.-Sino trade spat and talks of Trump impeachment. Notably, all the three major indices are hitting record highs. In fact, the S&P 500 breached the 3,200 level for the first time ever this week while the Dow Jones topped the 28,000 milestone last month.
From the year-to-date look, the Dow Jones gained 21.6% and S&P 500 climbed 27.9%. Nasdaq Composite Index outperformed, skyrocketing nearly 34% (read: Wall Street to See Best Year Since 2013: Will ETF Rally Last?).
The rally was powered by upbeat data across the globe, easing monetary policies, stronger-than-expected earnings and trade deal optimism. The U.S. economy is on a strong growth path with job additions at the fastest pace this year, unemployment dropping to the lowest level since 1969 and third-quarter GDP growth being revised upward from 1.9% to 2.1%. The housing market is also clearly showing signs of a strong recovery with lower mortgage rates and slower home price growth acting as catalysts.
Internationally, the initial phase-one trade deal reached between Washington and Beijing erased fears of global growth concerns. The latest update from China shows that acceleration of industrial output and retail sales growth in November bolstered investors’ confidence. Meanwhile, Japan's economy expanded more rapidly than initially reported in the third quarter (read: 4 Beaten-Down China ETFs That Could Rebound in 2020).
Major central banks across the globe are taking steps to prop up slowing economic growth. The Fed slashed interest rates three times so far this year and the European Central Bank also cut interest rates in a package of easing measures.
While there have been winners in many corners of the space, several ETFs have easily crushed the market by wide margins this year. Below, we have presented a bunch of top-performing ETFs of 2019 that are likely to continue outperforming as these have potentially superior weighting methodologies and a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy).
Invesco Solar ETF (TAN - Free Report) – Up 65%
This ETF offers global exposure to solar stocks by tracking the MAC Global Solar Energy Index. U.S. firms dominate the fund’s portfolio with nearly 45.2% share, followed by China (25.6%) and Germany (9.2%). The product has amassed $432.6 million in its asset base and trades in average daily volume of 233,000 shares. It charges investors 70 bps in fees per year and has a Zacks ETF Rank #2 (read: 5 Best-Performing Stocks of the Top ETF of 2019 So Far).
SPDR S&P Semiconductor ETF (XSD - Free Report) – Up 63.1%
This ETF offers exposure to the semiconductor corner of the broad tech sector. It tracks the S&P Semiconductor Select Industry Index, holding 35 stocks in its portfolio. The fund has AUM of $464.9 million and charges 35 bps in fees per year. It trades in average daily volume of 103,000 shares and has a Zacks ETF Rank #2.
VanEck Vectors Semiconductor ETF (SMH - Free Report) - Up 62.8%
This fund provides exposure to 25 semiconductor companies by tracking the MVIS US Listed Semiconductor 25 Index. It has managed assets worth $1.6 billion and charges 35 bps in annual fees and expenses. The ETF trades in average daily volume of 4.6 million shares and has a Zacks ETF Rank #2 (read: Trade Deal Cut in Principle? Sector ETFs to Soar).
Technology Select Sector SPDR Fund (XLK - Free Report) – Up 47.8%
This ETF targets the broad technology sector. It tracks the Technology Select Sector Index, holding 69 stocks in its basket. XLK is the most popular technology ETF with $25.9 billion in AUM and expense ratio of 0.13%. It has a Zacks ETF Rank #1 (read: 5 Solid Tech ETFs to Buy for Christmas).
Invesco DWA Technology Momentum ETF (PTF - Free Report) – Up 46%
This fund follows the Dorsey Wright Technology Technical Leaders Index and provides exposure to technology companies that are showing relative strength (momentum). Holding 42 stocks in the basket, it is illiquid and relatively unpopular with AUM of $206.4 million and average daily volume of 54,000 shares. The product has a Zacks ETF Rank #2 (read: 5 Secret Santa ETFs & Stocks This Christmas).
Invesco Aerospace & Defense ETF (PPA - Free Report) — Up 39.2%
It offers exposure to 48 companies involved in the development, manufacturing, and operations as well as provides support to U.S. defense, homeland security and aerospace. It tracks the SPADE Defense Index, charging 59 bps in annual fees from investors. The fund has so far managed assets of $1.2 billion and trades in average daily volume of $75,000 shares. It has a Zacks ETF Rank #2.
SPDR S&P Kensho Final Frontiers ETF (ROKT - Free Report) – Up 38.7%
This ETF follows the S&P Kensho Final Frontiers Index, which utilizes artificial intelligence and a quantitative weighting methodology to capture companies,, which offer products and services that are driving innovation behind the exploration of the final frontiers, including the areas of outer space and the deep sea. It holds a basket of 27 stocks and charges 45 bps in annual fees. The product has accumulated AUM of $5 million and has a Zacks ETF Rank #2.
Invesco QQQ (QQQ - Free Report) – Up 37.5%
This fund follows the Nasdaq-100 Index and holds a basket of 103 stocks. With AUM of $86.3 billion, it charges 20 bps in annual fees and average daily volume of 25.9 million shares. QQQ has a Zacks ETF Rank #1 with a Medium risk outlook.
First Trust NASDAQ Rising Dividend Achievers ETF (RDVY - Free Report) – Up 37.3%
This fund provides exposure to a diversified portfolio of 50 companies with a history of paying dividends. It tracks the NASDAQ US Rising Dividend Achievers Index, charging investors 50 bps in annual fees. The ETF has amassed $1.1 billion in its asset base and sees a good volume of 168,000 shares a day on average. It has a Zacks ETF Rank #2 (read: 5 Solid Dividend ETF & Stock Picks That Yield 5% or More).
SPDR S&P Software & Services ETF (XSW - Free Report) – Up 36.6%
This fund targets the software and services segment and follows the S&P Software & Services Select Industry Index. It holds 158 stocks in its basket, charging 35 bps in annual fees. XSW has accumulated $215 million and trades in average daily volume of 26,000 shares. It has a Zacks ETF Rank #1 (read: Best ETF Strategies for 2020).
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