Top Performing ETFs Of 2018

October 03, 2018

The third quarter was quite eventful for markets. In the U.S., the S&P 500 went from being barely in the green for the year at the end of June to record highs in September. In contrast, emerging markets, which were already down substantially midyear, sagged even more during Q3.

Meanwhile, on the interest rate front, U.S. Treasury yields clawed their way up from close to their low point of 2018 in June to nearly their highest level of the year in September. The 10-year U.S. Treasury has been holding above 3% and stands at 3.06%

With a quarter to go in 2018, the year thus far can best be characterized as uneven for markets. Strong economic fundamentals underpin stocks in the U.S., while trade and rising interest rate jitters keep international equities in check.

We’ll take a look at the top-performing ETFs of the year for 2018. Unsurprisingly, U.S. equity ETFs make up a large chunk of the list. But ETFs tied to one particular commodity have also been blazing hot.

Here we provide two lists. One that selects from the entire U.S.-listed ETF universe, including leveraged/inverse products, and another that excludes leveraged/inverse products.

Internet ETF Takes No. 1 Spot

Starting with the narrower, more “investable” list reveals a list of 20 products with gains ranging from 30% to 42%. At the top spot is the SPDR S&P Internet ETF (XWEB), with $68 million in assets under management (AUM).


Top-Performing ETFs Of The Year (excluding inverse/leveraged)

Ticker Fund YTD Return (%)
XWEB SPDR S&P Internet ETF 41.83
PSCH  Invesco S&P SmallCap Health Care ETF 40.37
OLO  DB Crude Oil Long ETN 38.95
DBO  Invesco DB Oil Fund 36.95
PSJ  Invesco Dynamic Software ETF 35.46
XHE  SPDR S&P Health Care Equipment ETF 35.09
PTH  Invesco DWA Healthcare Momentum ETF 34.87
USL  United States 12 Month Oil Fund LP 33.89
ARKG  ARK Genomic Revolution Multi-Sector ETF 33.16
USO  United States Oil Fund LP 32.81
FBGX UBS AG FI Enhanced Large Cap Growth ETN 32.42
IGV  iShares North American Tech-Software ETF 32.31
BNO  United States Brent Oil Fund LP 32.27
OILB  iPath Series B S&P GSCI Crude Oil ETN 32.12
OILK  ProShares K-1 Free Crude Oil Strategy ETF 31.55
FLGE  Credit Suisse FI Large Cap Growth Enhanced ETN 31.54
IHI  iShares U.S. Medical Devices ETF 31.39
XITK  SPDR FactSet Innovative Technology ETF 31.01
FINX  Global X FinTech ETF 30.52
OLEM  iPath Pure Beta Crude Oil ETN 30.30

Data measures total returns for the year-to-date period through October 1, 2018.


XWEB holds an equal-weighted basket of U.S. internet retail, software and services stocks. This area has been on fire in 2018, with high-profile internet stocks like Amazon and Alphabet leading the charge higher.

Because it equal-weights it holdings, XWEB gives as much weight to internet giants like Amazon and Alphabet as it does to much smaller companies like Yelp and Tripadvisor, but that hasn’t hurt returns one bit this year.

XWEB isn’t the only tech-focused ETF to soar in 2018. The Invesco Dynamic Software ETF (PSJ), the iShares North American Tech-Software ETF (IGV), the SPDR FactSet Innovative Technology ETF (XITK) and the Global X FinTech ETF (FINX) all made the top-performers list as well.

FINX is one of the more interesting of the bunch. It’s attracted $324 million of inflows this year thanks to strong performance and its focus on financial technology stocks. Mobile payments, crowd funding, blockchain and personal finance software are a few of the themes that FINX hones in on—all currently hot areas for investors.

Oil ETFs Surge

Earlier, we hinted that ETFs tied to a particular commodity were surging this year. Anyone keeping up with the financial headlines probably knows that commodity is oil.

Indeed, oil-tracking exchange-traded products have come out of nowhere to dominate the top-performers list. A total of eight such products are among the 20 top-performing ETFs, with gains of 30% or more.

The funds typically track futures on West Texas Intermediate (WTI) or Brent crude oil. The largest of the funds, the $1.7 billion United States Oil Fund (USO) uses a vanilla front-month roll strategy, while others like the $8 million DB Crude Oil Long ETN (OLO) use optimized rolling strategies to minimize contango or maximize backwardation.

In the current environment, with oil prices surging and the futures curve in backwardation, both strategies have paid off handsomely.

With WTI trading at $75 and Brent trading at $85, bets are growing that at least one of the benchmarks could challenge triple-digit levels in the not-to-distant future as tumbling Iranian and Venezuela production meets strong demand growth.

Health Care ETFs Cruising

Outside of tech and oil ETPs, the third group to register multiple entries on the top-performers list is health care. The Invesco S&P SmallCap Health Care ETF (PSCH), the SPDR S&P Health Care Equipment ETF (XHE) and the ARK Genomic Revolution Multi-Sector ETF (ARKG) are three of the five health care ETFs to make the cut.

The $339 million ARKG is the only actively managed fund among the five. It aims to hold stocks of companies that incorporate technological and scientific advancements in genomics into their businesses. Top holdings mainly come from the biotech industry.

Adding Leverage/Inverse To The Mix

Up until now, we’ve only discussed ETFs selected from the universe that excludes leveraged/inverse products. Including those creates a much different top-performers list.

Leveraged products tied to oil dominate this all-encompassing list, with the United States 3x Oil Fund (USOU) topping out at No. 1 with a 105% return for the year.

Bearish, leveraged bets on gold miners also paid off. The Direxion Daily Gold Miners Index Bear 3x Shares (DUST) rallied almost 66% as gold miner stocks tumbled.

For the full list, see the table below:


Top-Performing ETFs Of The Year (all-encompassing)

Ticker Fund YTD Return (%)
USOU  United States 3x Oil Fund 105.07
UWT VelocityShares 3x Long Crude Oil ETN 96.57
WTIU  UBS ETRACS - ProShares Daily 3x Long Crude ETN 93.33
OILU  ProShares UltraPro 3x Crude Oil ETF 91.51
DUST  Direxion Daily Gold Miners Index Bear 3x Shares 65.54
UCO  ProShares Ultra Bloomberg Crude Oil 62.03
TQQQ  ProShares UltraPro QQQ 54.74
JDST  Direxion Daily Junior Gold Miners Index Bear 3X Shares 53.77
BOM  DB Base Metals Double Short ETN 51.76
TECL  Direxion Daily Technology Bull 3x Shares 51.65
DSLV  VelocityShares 3X Inverse Silver ETN 48.01
CURE  Direxion Daily Healthcare Bull 3x Shares 45.92
GDXS  ProShares Ultrashort Gold Miners 44.02
DFEN  Direxion Daily Aerospace & Defense Bull 3X Shares 42.27
XWEB  SPDR S&P Internet ETF 41.83

Data measures total returns for the year-to-date period through October 1, 2018.


Email Sumit Roy at [email protected] or follow him on Twitter sumitroy2

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