Best and Worst Performing ETFs of the Year

2023 is shaping up to be a very different year than 2022.

sumit
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Senior ETF Analyst
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Reviewed by: Sumit Roy
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Edited by: Sumit Roy

It’s still early, but 2023 is shaping up to be nothing like 2022. Unlike last year, when stocks entered the year near record highs and then proceeded to grind continuously lower, 2023 has been quite a bit different. 

The S&P 500 started 2023 nearly 20% below its highs, while the Nasdaq-100 was at bear market lows, down around 35% from its peak. 

Growth was out of favor, while value stocks were in. 

That all changed once the calendar flipped into the new year. Suddenly, tech stocks and growth stocks started outperforming again, helping to push the broader market higher as well. 

The Invesco QQQ Trust (QQQ) jumped nearly 19% during the first quarter, while the S&P 500 gained 6%. 

The most beaten-down segments of the markets led the way in 1Q as investors sought bargains and looked more favorably upon growth stocks amid a decline in long-term interest rates. 

Crypto ETFs Dominate  

No group benefited most from the shift back toward growth stocks in 2023 than crypto ETFs. A full 18 of the 20 best-performing ETFs of the year (excluding leveraged and inverse funds) were related to the crypto industry.  

That includes the Valkyrie Bitcoin Miners ETF (WGMI), the ProShares Bitcoin Strategy ETF (BITO) and the Bitwise Crypto Industry Innovators ETF (BITQ), each with gains of more than 65%. 

These same ETFs were down by more than 65% in 2022, so even after their stunning first-quarter gains, prices for the funds are only back to where they were trading late last year. 

Still, these returns are nothing to sneeze at and they come despite a regulatory crackdown on the crypto industry by the SEC and the CFTC.  

Overshadowing that crackdown has been a steep rebound in cryptocurrency prices. Bitcoin is up 70% this year and is close to doubling from its low of $15,000 set in November. 

FANGs Make a Comeback  

Though crypto ETFs dominate the first quarter’s best-performers list, a couple of other ETFs managed to sneak into the top 20. 

That includes the MicroSectors FANG+ ETNs (FNGS) and the Yieldmax Tsla Option Income ETF (TSLY)

Megacap tech stocks have made a comeback this year, boosting returns of FNGS, which holds big positions in Nvidia, Netflix, AMD, Tesla and Microsoft.  

Meanwhile, TSLY has taken advantage of the enormous volatility in Tesla shares by writing covered calls on the stock. The fund has gained more than 36% this year. 

Outside of the top 20 ETFs that we highlight in the table at the bottom of this story, other winners this year include the ARK Next Generation Internet ETF (ARKW), up 33%; the Meet Kevin Pricing Power ETF (PP), up 30%; the Roundhill Ball Metaverse ETF (METV), up 29%; and the Roundhill Meme ETF (MEME), up 26%. 

Value Stocks Pull Back  

As growth stocks have come back into favor in 2023, investors have lost some of their enthusiasm for value stocks.  

Perhaps the best example of this is the energy sector, which is down by 1% as measured by the Energy Select Sector SPDR Fund (XLE). Last year, energy was the best-performing sector within the stock market, with a 64% gain. 

The financial sector is another group that’s lost its luster in 2023, no thanks to the banking crisis that erupted in March following the collapse of Silicon Valley Bank. 

The SPDR S&P Regional Banking ETF (KRE) lost a quarter of its value this year, making it the sixth-worst-performing ETF of the year. 

But no ETF has done worse than the Noble Absolute Return ETF (NOPE). This hedge-fund-in-an-ETF made some ill-timed bets against Tesla, gold and bitcoin late last year, leading to a whopping 62% loss for the fund so far in 2023. 

The actively managed ETF recently shifted gears to go long the Nasdaq and gold miners. 

Meanwhile, the United States Natural Gas Fund (UNG) was more than cut in half during the first quarter as natural gas prices plummeted due to a warm winter in the U.S. and rising production of the fuel. 

Cannabis ETFs also fared poorly during Q1, with losses of around 20% for funds like the Roundhill Cannabis ETF (WEED) and the ETFMG US Alternative Harvest ETF (MJUS)

For a full list of this year’s 20 best- and worst-performing ETFs, see the tables below: 

 

Best-Performing ETFs of the Year (ex-leveraged/inverse)

FundTickerYTD Return
Valkyrie Bitcoin Miners ETFWGMI +98.21%
Vaneck Digital Asset Mining ETFDAM +80.42%
Hashdex Bitcoin Futures ETFDEFI +69.04%
ProShares Bitcoin Strategy ETFBITO +68.03%
Vaneck Bitcoin Strategy ETFXBTF +67.51%
Simplify Bitcoin Strategy PLUS Income ETFMAXI +67.43%
Valkyrie Bitcoin Strategy ETFBTF +66.57%
Global X Blockchain & Bitcoin Strategy ETFBITS +66.35%
Bitwise Crypto Industry Innovators ETFBITQ +65.78%
Global X Blockchain ETFBKCH +65.06%
VanEck Digital Transformation ETFDAPP +64.96%
Invesco Alerian Galaxy Crypto Economy ETFSATO +60.67%
iShares Blockchain And Tech ETFIBLC +58.70%
Fidelity Crypto Industry And Digital Payments ETFFDIG +44.88%
First Trust SkyBridge Crypto Industry and Digital Economy ETFCRPT +43.43%
Advisorshares Managed Bitcoin Strategy ETFCRYP +37.74%
Yieldmax Tsla Option Income EtfTSLY +36.55%
Grayscale Future of Finance ETFGFOF +35.82%
MicroSectors FANG+ ETNsFNGS +35.49%
Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETFBLKC +35.04%

Source: Bloomberg. Data measures total returns for the year-to-date period through March 30. 

 

Worst-Performing ETFs of the Year (ex-leveraged/inverse)

FundTickerYTD Return
Noble Absolute Return ETFNOPE -62.35%
United States Natural Gas Fund LPUNG -52.62%
iPath Series B Bloomberg Natural Gas Subindex Total Return ETNGAZ -52.58%
KraneShares Global Carbon Offset Strategy ETFKSET -39.96%
United States 12 Month Natural Gas Fund LPUNL -34.36%
SPDR S&P Regional Banking ETFKRE -25.45%
iShares US Regional Banks ETFIAT -25.04%
iPath Series B Bloomberg Nickel Subindex Total Return ETNJJN -22.65%
Roundhill Cannabis ETFWEED -21.41%
ETFMG US Alternative Harvest ETFMJUS -20.92%
iPath Series B Bloomberg Energy Subindex Total Return ETNJJE -20.65%
Convexityshares 1x Spikes Futures ETFSPKX -20.40%
ProShares VIX Short-Term Futures ETFVIXY -20.21%
iPath Series B S&P 500 VIX Short-Term Futures ETNVXX -20.13%
Global X Cannabis ETFPOTX -19.23%
AdvisorShares Pure Cannabis ETFYOLO -19.15%
AXS Cannabis ETFTHCX -19.10%
First Trust Nasdaq Bank ETFFTXO -19.09%
Invesco KBW Bank ETFKBWB -18.69%
abrdn Physical Palladium Shares ETFPALL -18.60%

Source: Bloomberg. Data measures total returns for the year-to-date period through March 30 

 

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

Sumit Roy is the senior ETF analyst for etf.com, where he has worked for 13 years. He creates a variety of content for the platform, including news articles, analysis pieces, videos and podcasts.

Before joining etf.com, Sumit was the managing editor and commodities analyst for Hard Assets Investor. In those roles, he was responsible for most of the operations of HAI, a website dedicated to education about commodities investing.

Though he still closely follows the commodities beat, Sumit covers a much broader assortment of topics for etf.com, with a particular focus on stock and bond exchange-traded funds.

He is the host of etf.com’s Talk ETFs, a popular video series that features weekly interviews with thought leaders in the ETF industry. Sumit is also co-host of Exchange Traded Fridays, etf.com’s weekly podcast series.

He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing chess and snowboarding in Lake Tahoe.