24 ETFs for 2024, Pt. 4: Value Stocks & Crypto Miners

In this fourth and final installment of our 24 ETFs for 2024 series, etf.com research lead Kent Thune provides key insights on six funds that investors will be watching in 2024, including the potential shift in favor from tech-dominated ETFs to value-oriented funds, the massive attraction that a spot bitcoin ETF and “halving event” can bring to the entire crypto industry and the potential for long-term bond funds to continue gains if the U.S. economy enters a recession. 

Invesco S&P 500 Equal Weight ETF 

The Invesco S&P 500 Equal Weight ETF (RSP) exceeded $10 billion in net inflows in 2023, marking a record year for the fund. For 2024, the flows momentum may continue toward RSP as investors are growing more cautious about the high valuations of the mega-cap growth stocks that dominate the cap-weighted S&P 500 funds. 

A slowing economy in 2024 may not justify year-end 2023 valuations for high-growth tech stocks, and any market correction coming in the year is almost certain to hit those stocks harder than those in other sectors. For investors wanting to have their cake and eat it too in a slower but growing 2024 economy, equal-weighted funds like RSP can be a smart choice. 

• AUM: $49.6 billion 
• Expense ratio: 0.20% 
• YTD performance: 13.78% 
• As of date: Dec. 26, 2023 

Vanguard Value ETF 

Investors wanting to distance themselves from tech-heavy cap-weighted S&P 500 funds but also take a step further away than equal-weighted ETFs can do in this regard, value stock funds, such as the Vanguard Value ETF (VTV), can be a smart choice in 2024. 

While the lower interest rates expected in 2024 can be positive for growth stocks, an economy that grows slower than expected won’t likely justify current valuations priced for a soft landing. But value stocks that offer investors a balance of yields that look increasingly more attractive than those of fixed-income investments, as well as potential for price appreciation, could make value stocks the sweet spot of investing for 2024. 

• AUM: $105.7 billion 
• Expense ratio: 0.04% 
• YTD performance: 9.18% 
• As of date: Dec. 26, 2023 

Consumer Staples Select Sector SPDR Fund 

While 2023 was a banner year for consumer-discretionary ETFs, consumer staples and ETFs like the Consumer Staples Select Sector SPDR Fund (XLP)may take over the consumer spotlight in 2024. As the economy slows, consumers typically cut back spending on discretionary goods and services like travel and leisure but continue to buy essentials like food, household products and personal-care items. 

In other words, if consumers reduce their spending, it will be in discretionary spending areas like European vacations and Taylor Swift concerts, but consumers will still have the money to cover their groceries, utility bills and prescription drugs. 

• AUM: $14.7 billion 
• Expense ratio: 0.10% 
• YTD performance: -1.53% 
• As of date: Dec. 26, 2023 

Bitwise Crypto Industry Innovators ETF  

As I recently observed here, cryptocurrency stocks outperformed the price of bitcoin in 2023. Although this may not be the case in 2024, investors who aren’t quite ready to embrace the potential volatility of a single cryptocurrency but still want to allocate some of their portfolio to the broader crypto economy may instead be attracted to a more diversified choice like the Bitwise Crypto Industry Innovators ETF (BITQ). 

BITQ’s approach has been called a “pick-and-shovel” strategy, which harkens back to the California Gold Rush of the 19th century, where those who supplied miners with tools like picks and shovels often had more consistent and stable profits than individual miners. So, rather than “digging for bitcoin” in 2024, investors can sell picks and shovels with BITQ.  

• AUM: $151.6 million 
• Expense ratio: 0.85% 
• YTD performance: 266.81% 
• As of date: Dec. 26, 2023 

Valkyrie Bitcoin Miners ETF 

While the ETF industry buzzed about a spot bitcoin ETF in 2023, and bitcoin-related investments zoomed 100%-250% in price, jaw-dropping returns of more than 300% for bitcoin miner funds like the Valkyrie Bitcoin Miners ETF (WGMI) went largely unnoticed by mainstream financial media. It’s difficult to imagine a repeat performance in 2024, but the bitcoin halving event coming by midyear will have some influence here.  

Since halving cuts in half the reward that miners receive, a reduced block award will adversely affect some miners while others could prosper by integrating artificial-intelligence technology to enhance operational efficiencies. For investors betting on another big year for bitcoin miners, WGMI is a strong choice in this category, whereas risk-averse investors are wise to stay away. 

• AUM: $69.1 million 
• Expense ratio: 0.75% 
• YTD performance: 344.70% 
• As of date: Dec. 26, 2023 

PIMCO 25+ Year Zero Coupon US Treasury Index ETF 

For investors betting on a recession in 2024, the most rate-sensitive bond exchange-traded funds like the PIMCO 25+ Year Zero Coupon US Treasury Index ETF (ZROZ) are typically the biggest gainers in a falling rate environment as bond prices move in the opposite direction as yields, and further for longer maturities. For example, as yields began falling in late October, the ZROZ price jumped 35% over the following two months while the broader bond market ETFs rose 10%.  

In a recessionary environment, rates and yields may fall further, which would provide more upside potential for ZROZ and other long-term bond ETFs. But bond prices have already priced in a soft landing with expectations of 75-100 basis points of rate cuts in 2024. Thus, for long-term bond ETFs to gain significantly in 2024, a hard landing may be required. 

• AUM: $1.3 billion 
• Expense ratio: 0.15% 
• YTD performance:  
• As of date: Dec. 26, 2023 

See the other articles in our 24 ETFs for 2024 series: 

• 24 ETFs for 2024, Pt. 1: Big Funds With Momentum 
• 24 ETFs for 2024, Pt. 2: Bitcoin & Defensive Ideas 
• 24 ETFs for 2024, Pt. 3: Covered Calls & Mag 7