Top Performing ETFs Of The Year

July 11, 2018

A little over a week into the second half of the year and markets are perking up. The phrase “all-time high” is being heard again as U.S. small caps, midcaps and tech stocks race ever higher. Even the SPDR S&P 500 ETF Trust (SPY), bruised and battered in February and March due to a cocktail of concerns, has recovered to return 5.4% so far this year.

That’s a nice gain for six months, but not nearly enough to be among our list of the top-performing exchange-traded funds of the year. For that, an ETF would need a return of 25% or more, a threshold that’s been eclipsed by about three dozen funds.

As we usually do when putting together this article, we’ve come up with two lists―one that includes leveraged, inverse and volatility products ―and one that does not.

Health Care Outperformers
The list with exclusions, which contains what one could call the more “investable” ETFs, has returns ranging from 24.7% to 35.7%. The 15 funds on this list are quite eclectic, but can be sorted into a few thematic buckets.

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

Ticker Fund YTD Return (%)
PSCH  Invesco S&P SmallCap Health Care ETF 35.75
XWEB  SPDR S&P Internet ETF 32.94
NIB  iPath Bloomberg Cocoa Subindex Total Return ETN 30.28
FDN First Trust Dow Jones Internet Index Fund 29.88
IBUY  Amplify Online Retail 28.77
CLIX  ProShares Long Online/Short Stores ETF 27.63
XITK  SPDR FactSet Innovative Technology ETF 26.98
ARKG  ARK Genomic Revolution Multi-Sector ETF 26.75
ARKK  ARK Innovation ETF 26.65
PTH  Invesco DWA Healthcare Momentum ETF 26.26
USO  United States Oil Fund LP 25.48
OLO  DB Crude Oil Long ETN 25.41
OILB  iPath Series B S&P GSCI Crude Oil ETN 25.05
ARKW  ARK Web x.0 ETF 24.88
XHE  SPDR S&P Health Care Equipment ETF 24.72

Note: Data measures total returns for the year-to-date period through July 10, 2018.

 

The first bucket is health care. Four health care ETFs made the cut: the Invesco S&P SmallCap Health Care ETF (PSCH), the ARK Genomic Revolution Multi-Sector ETF (ARKG), the Invesco DWA Healthcare Momentum ETF (PTH) and the SPDR S&P Health Care Equipment ETF (XHE).

These four ETFs have handily beaten the 6% return of the largest fund in the space, the $15.5 billion Health Care Select Sector SPDR Fund (XLV). A focus on small caps, health care equipment and biotech has given these ETFs an advantage over XLV, which is heavily weighted towards stocks of large pharmaceutical companies.

Internet ETFs Surge
There’s only one group that features more funds than health care on the top performers list: internet ETFs. The SPDR S&P Internet ETF (XWEB), the First Trust Dow Jones Internet Index Fund (FDN), the Amplify Online Retail ETF (IBUY), the ProShares Long Online/Short Stores ETF (CLIX) and the Ark Web x.0 ETF (ARKW) all have stellar returns so far this year.

Internet heavyweights like Amazon, Facebook, Netflix and Alphabet have continued their seemingly never-ending run in 2018. They feature prominently in FDN, which holds a market-cap-weighted basket of U.S. internet stocks.

But smaller internet companies such as Etsy, Wayfair and Stamps.com have also been surging, boosting returns for funds like XWEB, IBUY and CLIX.

XWEB holds an equal-weighted basket of U.S. internet stocks, while IBUY holds an equal-weighted basket of global online retail stocks. Meanwhile, CLIX his similar exposure as IBUY but layers on top a short position in shares of brick-and-mortar retailers.

Commodity Winners
While the bulk of the top performers list is made up of equity products, a handful focus on commodities. The iPath Bloomberg Cocoa Subindex Total Return ETN (NIB) is the best of that bunch, with a gain of more than 30%.

Adverse weather in the growing regions of West Africa and rising demand helped cocoa recover from its lowest level in a decade set late last year.

Meanwhile, tight supply and demand fundamentals for another commodity—oil—helped fuel returns of around 25% for products like the United States Oil Fund (USO), the DB Crude Oil Long ETN (OLO) and the iPath Series B S&P GSCI Crude Oil ETN (OILB).

The oil market moved into deficit this year after several years of oversupply due to plunging production in Venezuela, combined with robust demand growth. The International Energy Agency expects market tightness to continue next year as U.S. sanctions take a bit out of Iranian oil exports.

All-Encompassing List
While three oil ETPs made the aforementioned top-performers list, another seven made our all-encompassing list, which includes leveraged, inverse and volatility products.

The United States 3x Oil Fund (USOU) topped this list, with a heady 82% return.

In addition to the seven oil products, the BMO REX Microsectors FANG+ Index 3X Leveraged ETN (FNGU), the REX VolMAXX Long VIX Futures Strategy ETF (VMAX) and the Direxion Daily S&P Biotech Bull 3X Shares (LABU) also made the cut.

See the full list below:

Top Performing ETFs Of The Year (all-encompassing)

Ticker Fund YTD Return (%)
USOU  United States 3x Oil Fund 81.97
UWT  VelocityShares 3x Long Crude Oil ETN 75.89
OILU  ProShares UltraPro 3x Crude Oil ETF 68.57
WTIU  UBS ETRACS - ProShares Daily 3x Long Crude ETN 68.25
FNGU  BMO REX MicroSectors FANG+ Index 3X Leveraged ETN 57.60
UBRT AxelaTrader 3x Long Brent Crude Oil ETN 55.76
VMAX  REX VolMAXX Long VIX Futures Strategy ETF 52.12
GUSH  Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 3X Shares 46.62
UCO  ProShares Ultra Bloomberg Crude Oil 46.50
LABU  Direxion Daily S&P Biotech Bull 3X Shares 38.60

Note: Data measures total returns for the year-to-date period through July 10, 2018.

 

 

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

 

 

Find your next ETF

CLEAR FILTER