Best Performing ETFs of the Year

Crypto exchange-traded funds dominated this year’s best performers.

sumit
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Reviewed by: Lisa Barr
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Edited by: Lisa Barr

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 39% during the first half of 2023, while the SPDR S&P 500 ETF Trust (SPY) gained just under 17%. 

The most beaten-down segments of the markets led the way in the first six months of the year as investors sought bargains and looked more favorably upon technology stocks amid excitement about artificial intelligence.  

Crypto ETFs Dominate  

No group benefited most from the shift back toward growth stocks in 2023 than crypto ETFs. A full 17 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 80% or more.  

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 around August of 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 more than 80% this year and has nearly doubled off its low of $15,000 set in November.  

Hope that the SEC may finally allow a U.S.-listed spot bitcoin ETF to trade in the U.S. have recently pushed prices for the cryptocurrency to its highest level in over a year.  

FANGs Make a Comeback  

Though crypto ETFs dominated the first quarter’s best-performers list, a few 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 61% 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 Meet Kevin Pricing Power ETF (PP), up 53%; the ARK Next Generation Internet ETF (ARKW), up 52%; the Global X Nigeria ETF (NGE), up 50%; and the VanEck Semiconductor ETF (SMH), up 50%. 

For a full list of this year’s 25 best-performing ETFs, see the table below: 
 
Best-Performing ETFs of the Year (ex-leveraged/inverse) 

TickerFundYTD Return (%)
WGMI Valkyrie Bitcoin Miners ETF191.05
DAPP VanEck Digital Transformation ETF155.06
BKCH Global X Blockchain ETF140.95
BITQ Bitwise Crypto Industry Innovators ETF137.46
SATO Invesco Alerian Galaxy Crypto Economy ETF129.32
BITS Global X Blockchain & Bitcoin Strategy ETF108.78
IBLC iShares Blockchain And Tech ETF98.16
CRPT First Trust SkyBridge Crypto Industry and Digital Economy ETF85.47
FDIG Fidelity Crypto Industry And Digital Payments ETF85.45
MAXI Simplify Bitcoin Strategy PLUS Income ETF84.65
DEFI Hashdex Bitcoin Futures ETF81.65
BITOProShares Bitcoin Strategy ETF79.57
XBTF Vaneck Bitcoin Strategy ETF78.37
BTF Valkyrie Bitcoin Strategy ETF76.64
GFOF Grayscale Future of Finance ETF75.74
FNGS MicroSectors FANG+ ETNs73.98
BLKC Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF63.78
TSLY Yieldmax Tsla Option Income Etf61.20
TWEB SoFi Web 3 ETF61.10
SPRX Spear Alpha ETF53.51
PP The Meet Kevin Pricing Power ETF53.27
ARKW ARK Next Generation Internet ETF52.04
NGE Global X MSCI Nigeria ETF50.50
BLOK Amplify Transformational Data Sharing ETF50.46
SMH VanEck Semiconductor ETF50.04

 

 

 

Sumit Roy is the senior ETF analyst for etf.com, where he's worked for 12 years. Before joining the company, Roy was the managing editor and commodities analyst for Hard Assets Investor. He lives in the San Francisco Bay Area, where he enjoys climbing the city’s steep hills, playing pickleball and snowboarding.