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Braving all hurdles including recession fears, trade dispute, Brexit and geopolitical tensions, Wall Street has enjoyed a huge rally this year with all the three major indices hitting record highs lately. This is especially thanks to trade optimism, stronger-than-expected earnings, a dovish Fed, and steady yet gradually improving economy (read: Wall Street to See Best Year Since 2013: Will ETF Rally Last?).
In fact, the S&P 500 is on track to register its best performance since 2013 and the third-strongest annual gain since the start of the century, having gained 27.9% so far this year. Meanwhile, the Nasdaq and the Dow Jones are up 34% and 21.6%, respectively.
Since many corners of the equity world witnessed a solid run, a few sector ETFs performed incredibly, thereby comfortably crushing the broader markets. Below, we have highlighted five such funds that have been the 2019 star performers and could also be winners in the New Year if the current trends continue.
This ETF, which offers global exposure to 22 solar stocks, has been rising on strong solar installation, a rebound in global solar demand, California’s push to make solar panels and competitive pricing. American 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 (Buy) with a High risk outlook (read: 5 Best-Performing Stocks of the Top ETF of 2019 So Far).
Semiconductors are shining and leading the broader technology sector on trade optimism as chip stocks have a lot of exposure to China. They derive a large portion of their revenues from China since it is the world’s biggest chip market and have supply chains in the country. While all the semiconductor ETFs have risen, SMH is the biggest winner. 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 with a High risk outlook (read: Soft Retail Sales in November: ETF Winners & Losers).
Biotech ETFs surged on a string of positive news flow, including trial results, favorable regulatory tidings, deal activities, as well as better-than-expected earnings. BBC has a novel approach to biotechnology investing with exposure to companies that are in the clinical trial stage. This can easily be done by tracking the LifeSci Biotechnology Clinical Trials Index. BBC has amassed $35 million in its asset base and charges 79 bps in fees per year from investors. It trades in a light average daily volume of around 8,000 shares and holds 96 securities in its basket. The product carries a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: Top Performing ETFs of 2019).
Invesco WilderHill Clean Energy ETF (PBW - Free Report) – Up 56.8%
This product has been powered by a solar surge and a push to generate 100% clean energy. It provides exposure to U.S. companies engaged in the business of advancement of cleaner energy and conservation. It follows the WilderHill Clean Energy Index and holds about 40 stocks in its basket. The fund has AUM of $208.4 million in its asset base and sees a good volume of nearly 27,000 shares a day. It charges 70 bps in annual fees (read: Be Thankful to These Outperforming Sector ETFs This Year).
iShares U.S. Home Construction ETF (ITB - Free Report) – Up 47.2%
The U.S. homebuilding market has been buoyant on lower mortgage rates and decelerating home price growth. The Fed’s easy monetary policy stance has pushed mortgage rates down and made refinance cheaper, encouraging people to buy more homes. ITB provides exposure to U.S. companies that manufacture residential homes by tracking the Dow Jones U.S. Select Home Construction Index. With AUM of $1.1 billion, it holds a basket of 45 stocks and charges 42 bps in annual fees. It trades in a hefty volume of around 2.3 million shares per day on average and has a Zacks ETF Rank #3 with a High risk outlook (read: 5 Best Stocks in the Hot Homebuilding ETF).
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5 Market-Beating Sector ETFs of 2019
Braving all hurdles including recession fears, trade dispute, Brexit and geopolitical tensions, Wall Street has enjoyed a huge rally this year with all the three major indices hitting record highs lately. This is especially thanks to trade optimism, stronger-than-expected earnings, a dovish Fed, and steady yet gradually improving economy (read: Wall Street to See Best Year Since 2013: Will ETF Rally Last?).
In fact, the S&P 500 is on track to register its best performance since 2013 and the third-strongest annual gain since the start of the century, having gained 27.9% so far this year. Meanwhile, the Nasdaq and the Dow Jones are up 34% and 21.6%, respectively.
Since many corners of the equity world witnessed a solid run, a few sector ETFs performed incredibly, thereby comfortably crushing the broader markets. Below, we have highlighted five such funds that have been the 2019 star performers and could also be winners in the New Year if the current trends continue.
Invesco Solar ETF (TAN - Free Report) – Up 65%
This ETF, which offers global exposure to 22 solar stocks, has been rising on strong solar installation, a rebound in global solar demand, California’s push to make solar panels and competitive pricing. American 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 (Buy) with a High risk outlook (read: 5 Best-Performing Stocks of the Top ETF of 2019 So Far).
VanEck Vectors Semiconductor ETF (SMH - Free Report) - Up 62.8%
Semiconductors are shining and leading the broader technology sector on trade optimism as chip stocks have a lot of exposure to China. They derive a large portion of their revenues from China since it is the world’s biggest chip market and have supply chains in the country. While all the semiconductor ETFs have risen, SMH is the biggest winner. 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 with a High risk outlook (read: Soft Retail Sales in November: ETF Winners & Losers).
Virtus LifeSci Biotech Clinical Trials ETF (BBC - Free Report) — Up 60.5%
Biotech ETFs surged on a string of positive news flow, including trial results, favorable regulatory tidings, deal activities, as well as better-than-expected earnings. BBC has a novel approach to biotechnology investing with exposure to companies that are in the clinical trial stage. This can easily be done by tracking the LifeSci Biotechnology Clinical Trials Index. BBC has amassed $35 million in its asset base and charges 79 bps in fees per year from investors. It trades in a light average daily volume of around 8,000 shares and holds 96 securities in its basket. The product carries a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: Top Performing ETFs of 2019).
Invesco WilderHill Clean Energy ETF (PBW - Free Report) – Up 56.8%
This product has been powered by a solar surge and a push to generate 100% clean energy. It provides exposure to U.S. companies engaged in the business of advancement of cleaner energy and conservation. It follows the WilderHill Clean Energy Index and holds about 40 stocks in its basket. The fund has AUM of $208.4 million in its asset base and sees a good volume of nearly 27,000 shares a day. It charges 70 bps in annual fees (read: Be Thankful to These Outperforming Sector ETFs This Year).
iShares U.S. Home Construction ETF (ITB - Free Report) – Up 47.2%
The U.S. homebuilding market has been buoyant on lower mortgage rates and decelerating home price growth. The Fed’s easy monetary policy stance has pushed mortgage rates down and made refinance cheaper, encouraging people to buy more homes. ITB provides exposure to U.S. companies that manufacture residential homes by tracking the Dow Jones U.S. Select Home Construction Index. With AUM of $1.1 billion, it holds a basket of 45 stocks and charges 42 bps in annual fees. It trades in a hefty volume of around 2.3 million shares per day on average and has a Zacks ETF Rank #3 with a High risk outlook (read: 5 Best Stocks in the Hot Homebuilding ETF).
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>