Top 10 ETF Performers YTD

October 22, 2013

TAN leads performance by a landslide year-to-date, but the nine other funds that follow are impressive in their own right.

If you consulted an ETF crystal ball at the end of December, what would it have told you to buy? Gold, a safe haven from never-ending quantitative easing? Or perhaps bonds, hedging ankle-high rates with a bet on the yield curve? Maybe that ball would have shown you corn, wheat and coffee, promising a high return from the commodities futures curve.

Of course, that crystal ball doesn’t exist, and although some call hindsight 20/20, calling the best-performing ETFs so far this year doesn’t seem like something you could have predicted when the ball dropped at midnight last New Year’s Eve.

That said, 2013’s 10 best so far, excluding leveraged and inverse funds, is an awe-inspiring list.

YTD 10 Best Performers

Solar, You’re No. 1

Thanks to the Obama administration and the Environmental Protection Agency crackdown over the past year, alternative energy investments have taken broad strides ahead of their peers, and the Guggenheim Solar fund (TAN | B-33) has had the quickest pace, to date.

TAN has skyrocketed 152.47 percent year-to-date, making headlines along the way; at the end of September, it boasted the title “2013’s Hottest ETF,” having nearly ticked up to that 100 percent year-to-date performance bracket, at 99.23 percent.

Now, TAN boldly peaked where no solar fund has risen before, raking in $153 million along the way, doubling its assets. It currently holds $315 million.

Jogging up to the finish line for year-to-date performers just a few steps behind TAN is its sibling solar ETF, the Market Vectors Solar Energy (KWT | C-30), which has ramped up performance by 102.16 percent since Dec. 31, 2012.

The First Trust Nasdaq Clean Edge Green Energy fund (QCLN | B-22) spiked 88.45 percent, rolling in at third place, and the fourth, fifth and sixth contenders for the year’s best were also clean energy funds:

  • Market Vectors Global Alternative Energy (GEX | B-22) jumped 73.19 percent
  • PowerShares WilderHill Clean Energy (PBW | B-16) added 68.15 percent
  • First Trust ISE Global Wind Energy (FAN | C-17) grew 62.79 percent

“The demand for solar globally has been extremely strong,” this year, said Paul Baiocchi, senior ETF specialist, in a recent podcast with Yorba Media.



Make Room For China Tech

It’s not just government bolstering that’s lit the flame below alternative energy, either. Consumer use of economically friendly resources like solar panels and wind energy has grown to be consumer friendly on a cost-efficiency and accessibility basis. That is making funds that carry a basket of solar, wind and other alternative companies blossom into the best investments you should have made at the start of 2013.

China plays a role in the solar spike, too, as Chinese manufacturers have made an effort to tilt the export-heavy economy into a more domestic consumer environment by pushing tourism, which has brought the PowerShares Golden Dragon China ETF (PGJ | B-26) into the ranks of best-so-far, too.

PGJ has increased 61.63 percent year-to-date. This seventh-place performer of 2013 lands on the list with the ninth runner-up, the Guggenheim China Technology fund (CQQQ | D-31), which has grown 58.13 percent.

Both funds have a well-stocked allocation (PGJ holds 8.08 percent and CQQQ is at 11.95 percent) toward Baidu Inc. (NasdaqGS: BIDU), a Chinese Web services company that has reported a 65.5 percent total return year-to-date, according to Bloomberg data.

Facebook Flop Turned Fruitful

In eighth place, and somewhat of the black sheep of this winner’s circle, is the Global X Social Media fund (SOCL | C-33), which has pulled itself up by its bootstraps since a rough ride in spring of 2012 and a few consecutive months thereafter of volatility.

Since the start of 2013, SOCL is up 60.43 percent, thriving now that Facebook (NasdaqGS: FB), a 13.01 percent holding for the fund, has turned the corner after an all-too-embarrassing IPO.

Finally, the last-place winner is the iShares Global Clean Energy fund (ICLN | B-17), coming up short by a few steps compared with related clean energy funds GEX and QCLN, with a total return of 56.28 percent. The reason for ICLN’s lag is in its holdings—particularly, in what’s not in its holdings.

GEX is allocated 10.88 percent to Tesla Motors (NasdaqGS: TSLA), and QCLN’s portfolio is 8.19 percent Tesla.

ICLN, on the other hand, has no allocation to the Silicon Valley-based electric luxury car manufacturer, which is a shame for ICLN, as Tesla has rocketed ahead of the competition with an astounding 427.4 percent total return year-to-date, according to Bloomberg data.


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