24 ETFs for 2024, Pt. 1: Big Funds With Momentum

Sumit Roy

Senior ETF Analyst

Dec 26, 2023

Reviewed by: Ron Day

Edited by: Kent Thune

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In this first installment of our 24 ETFs for 2024 series, etf.com senior analyst, Sumit Roy, highlights six funds that made headlines in 2023 for a variety of reasons, including outstanding performance and strong inflows, as well as funds that can provide defensive qualities in a year that is certain to see increased volatility.

SPDR S&P 500 ETF Trust

After falling by nearly 25% to its low point in 2022, the SPDR S&P 500 ETF Trust (SPY), the world’s largest ETF, staged a remarkable comeback in 2023. Today, the fund that tracks the venerable S&P 500 index, is just a couple of percentage points away from making a record high for the first time in two years.

SPY might not be the most exciting ETF, but it’s popular for a reason. For over three decades, the fund has been a reliable vehicle for investors seeking broad U.S. stock market exposure. That will continue to be the case in 2024.

AUM: $493.3 billion
Expense Ratio: 0.09%
12-month return: 25.50%
As of Date: Dec. 21, 2023

Invesco QQQ Trust

Few people believed that when the Invesco QQQ Trust (QQQ) was down 35% from its highs at the start of 2023, that it would make new records less than a year later. But that’s precisely what it did.

The tech-heavy ETF continues to be a powerhouse, making fools of anyone who doubts it. Even though some may consider the ETF’s underlying index “arbitrary”—only non-financial stocks listed on the Nasdaq exchange are included—for years it has served as a surprisingly good proxy for U.S. growth and innovation.

All the “magnificent seven” hold substantial weights in the ETF. If they continue to roll in 2024, expect QQQ to follow suit.

AUM: $229.4 billion
Expense Ratio: 0.20%
YTD Performance: 54.11%
As of Date: Dec. 21, 2023

iShares Gold Trust Micro

After briefly making a new record high in December, the price of gold retreated. But it certainly looks like the yellow metal has momentum on its side.

Fundamental factors like geopolitical worries, a weakening dollar and potentially lower interest rates are also lending support to gold.

For investors seeking exposure to the metal, there is perhaps no better investment vehicle than iShares Gold Trust Micro (IAUM). It’s currently the cheapest gold ETF on the market with an ultra-low 0.09% expense ratio.

AUM: $1.2 billion
Expense Ratio: 0.09%
YTD Performance: 12.08%
As of Date: Dec. 21, 2023

iShares MSCI USA Quality Factor ETF

Quality ETFs were in vogue in 2023, none more so than iShares MSCI USA Quality Factor ETF (QUAL). The ETF, which was one of 11 ETFs that took in more than $10 billion of new money this year, appeals to investors looking to invest in the companies with the strongest fundamentals.

In a year in which interest rate surged and recession concerns were front and center, the demand for quality ETFs makes sense. And if high rates and recession worries continue to haunt investors in 2024, quality funds might continue to see demand next year.

QUAL is the largest ETF in the segment with more than $36 billion in AUM. It holds stocks of companies that have “high return on equity, stable year-over-year earnings growth and low financial leverage.”

AUM: $36.0 billion
Expense Ratio: 0.15%
YTD Performance: 30.60%
As of Date: Dec. 21, 2023

Pacer U.S. Cash Cows 100 ETF

The Pacer U.S. Cash Cows 100 ETF (COWZ) is the most popular ETF among a new breed of value ETFs that look at cash flows rather than traditional value metrics like earnings per share and book value. It’s a strategy that performed well in 2022 when value stocks trounced growth stocks.

But it’s also a strategy that’s done pretty well in 2023, a year in which growth stocks made a surprising comeback. This year, COWZ has performed nearly twice as well as traditional value ETFs.

Perhaps we’re seeing a sea shift in value investing. If so, COWZ could continue to benefit.

AUM: $18.2 billion
Expense Ratio: 0.49%
YTD Performance: 14.85%
As of Date: Dec. 21, 2023

iShares 0-3 Month Treasury Bond ETF

Assets in money market funds increased by a record $1.2 trillion in 2023 as investors took advantage of the highly attractive 5% rates on those vehicles. Nothing in the exchange-traded funds space can boast such hefty inflows, but ultra-short-term bond ETFs—the closest things to money market funds in an ETF wrapper—had a relatively strong year with inflows of more than $24 billion.

Nearly half of that went into a single fund, the iShares 0-3 Month Treasury Bond ETF (SGOV). Having launched in 2020, SGOV is a new kid on the block, but it’s already cemented itself as one of the top ETFs in the fast-growing ultra-short-term bond ETF category. We’ll see whether investors keep putting money in ultra-short-term bond ETFs in general and SGOV in particular in 2024.

AUM: $17.5 billion
Expense Ratio: 0.07%
YTD Performance: 5.01%
As of Date: Dec. 21, 2023

Sumit Roy

| Contact: [email protected]

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.

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