By now, most investors are well aware that 2019 will go down in the history books as one of the best years ever for financial markets. When all was said and done, U.S. equities delivered their best return in six years, and U.S. bonds had their best showing in 17 years.
The $306 billion SPDR S&P 500 ETF Trust (SPY), the world’s largest equity ETFs, gained 31.2% on the year. At the same time, the biggest bond ETF, the $69 billion iShares Core U.S. Aggregate Bond ETF (AGG), jumped 8.5%.
These are outstanding returns for vanilla, broad market funds. Of course, in a year of such phenomenal performance by these plain, index-tracking products, you might guess that more focused funds have done even better—and you’d be right.
Last year’s top 20 ETFs each saw gains of 50% or more. That’s not even including the leveraged products out there, like the Direxion Daily Semiconductor Bull 3X Shares (SOXL), the Direxion Daily Technology Bull 3X Shares (TECL) or the Direxion Daily Homebuilders & Supplies Bull 3X Shares (NAIL), up more than 185% apiece.
Best-Performing Leveraged ETFs Of The Year
|Ticker||Fund||YTD Return (%)|
|SOXL||Direxion Daily Semiconductor Bull 3X Shares||231.9|
|TECL||Direxion Daily Technology Bull 3X Shares||185.6|
|NAIL||Direxion Daily Homebuilders & Supplies Bull 3X Shares||184.7|
|RUSL||Direxion Daily Russia Bull 3X Shares||138.9|
|HOML||ETRACS Monthly Reset 2xLeveraged ISE Exclusively Homebuilders ETN||137.7|
Data measures total returns for 2019.
Alternative Energy ETFs Shine
To be sure, the average ETF investor isn’t holding those geared products. But they didn’t have to. 2019 was an extraordinary year in which eye-popping returns were the norm. Some alternative energy ETFs, for example, returned upward of 66.5%.
That’s how much the Invesco Solar ETF (TAN), the No. 1 best-performing nonleveraged ETF of 2019, gave investors. It was joined by the Invesco WilderHill Clean Energy ETF (PBW), the SPDR S&P Kensho Clean Power ETF (CNRG) and the ALPS Clean Energy ETF (ACES), each of which rose by more than 50%.
Semis Power Tech ETFs
Another group to sizzle in 2019 was semiconductor ETFs. The SPDR S&P Semiconductor ETF (XSD), the VanEck Vectors Semiconductor ETF (SMH), the iShares PHLX Semiconductor ETF (SOXX) and the First Trust Nasdaq Semiconductor ETF (FTXL) were among those funds benefiting from the rally in chip stocks, gaining as much as 64.7%.
Semis weren’t the only technology ETFs to soar in 2019. Even a broad sector fund, such as the Technology Select Sector SPDR Fund (XLK), managed to crack the top 20, rising a whopping 49.9%. The Fidelity MSCI Information Technology Index ETF (FTEC) and the Vanguard Information Technology ETF (VGT) weren’t in the top 20, but they were just behind, with gains of 48.9% and 48.6%, respectively.
(Use our stock finder tool to find an ETF’s allocation to a certain stock.)
Multiyear Highs In Precious Metals
Precious metal funds had multiple entries on the best-performing ETFs list. The ETFMG Prime Junior Silver Miners ETF (SILJ), the Aberdeen Standard Physical Palladium Shares ETF (PALL) and the U.S. Global GO Gold and Precious Metal Miners ETF (GOAU) were among the biggest winners in the space.
It was a good year for precious metals, as gold topped $1,500/oz for the first time in six years; silver breached $19 for the first time in three years; and palladium hit a record high just under $2,000.
Low interest rates, and in palladium’s case, a favorable supply/demand imbalance, fueled gains in the precious metals complex.
Best Health Care & EM ETFs
Rounding out the list of best-performing ETFs are a few funds from other categories. The Virtus LifeSci Biotech Clinical Trials ETF (BBC) and the ALPS Medical Breakthroughs ETF (SBIO) were the top health care ETFs of the year; and the Global X MSCI China Consumer Staples ETF (CHIS) and the Franklin FTSE Russia ETF (FLRU) were the top emerging market equity ETF.
For a full list of 2019’s best-performing ETFs, see the table below:
Best Performing ETFs Of The Year (ex. leveraged/inverse)
Data measures total returns for 2019.