Wall Street extended its decade-long bull run to start the New Year with the major indices hitting new all-time highs. In fact, the Dow Jones crossed the 29,000 milestone while the S&P 500 breached the 3,300 level (read: Dow Hits 29,000 Again: 5 Stocks Driving the ETF).
The latest rally was powered by signing of the U.S.-China phase 1 trade deal and Q4 earnings optimism. Additionally, the Fed’s accommodative interest rate policy and a resilient domestic economy have been driving stocks higher. Lower interest rates will keep borrowing costs down, thereby resulting in higher consumer spending and an upswing in economic activities. The U.S. economy has been witnessing steady growth backed by a strong job market, a recovering housing market and higher consumer confidence.
Further, a technology surge is adding to the strength. Though Middle East tensions resulted in some volatility in early 2020, it has abated for now.
While there have been winners in many corners of the space, several ETFs have easily crushed the market by wide margins this year. Below, we have presented a bunch of top-performing ETFs to start 2020 that are likely to continue outperforming, should the trends prevail.
This ETF seeks to invest in companies across the cannabis industry and tracks the Cannabis Index. It holds 26 stocks in its basket with Canadian firms accounting for 81.7% of assets while the United States takes 10.3% share. The product has accumulated $8.3 million in its asset base within four months of debut and has expense ratio of 0.50% (read: Cannabis ETFs Are Soaring in 2020: Will the Trend Continue?).
This product provides exposure to 39 U.S. companies engaged in the business of advancement of cleaner energy and conservation. It has AUM of $258.1 million and charges 70 bps in fees per year from investors (read: ESG ETFs: Doing Well And Doing Good).
This ETF seeks to invest in companies that stand to potentially benefit from the increased adoption of cybersecurity technology, such as those whose principal business is development and management of security protocol, preventing intrusion and attacks to systems, networks, applications, computers and mobile devices. This can be easily done by the Indxx Cybersecurity Index. Holding 31 securities in its basket, BUG has amassed $2.7 million in its asset base and charges 50 bps in annual fees.
This is an actively managed fund focusing on companies that are expected to benefit from the shift in technology infrastructure to the cloud, enabling mobile, new and local services. The fund holds 43 stocks in its basket. It has amassed $453.7 million in its asset base and its expense ratio is 0.75%.
This ETF has accumulated around $470 million in its asset base since its debut on Apr 12, 2019. It seeks to invest in companies positioned to benefit from the increased adoption of cloud computing technology, including companies whose principal business is in offering computing Software-as-a-Service, Platform-as-a-Service, Infrastructure-as-a-Service, managed server storage space and data center real estate investment trusts, and/or cloud and edge computing infrastructure and hardware. The fund tracks the Indxx Global Cloud Computing Index, holding 37 securities in its basket. It charges 68 bps in annual fees (read: 5 Hot ETF Themes for 2020).
With AUM of $69.9 million, this fund seeks to provide exposure to companies with robust revenue growth that may provide leading-edge products and services. It follows the FactSet Innovative Technology Index and holds 99 stocks in its basket. The product has an expense ratio of 0.45%.
The fund invests in some of the largest global companies that derive most of their revenues from the Internet and e-commerce sectors that exhibit quality and growth potential by tracking the O’Shares Global Internet Giants Index. It holds a basket of 71 stocks and charges 48 bps in annual fees. OGIG has been able to attract $49.8 million in its asset base.
The product invests in the full lithium cycle, from mining and refining the metal, through battery production by tracking the Solactive Global Lithium Index. Holding 40 securities in its basket, it has amassed $533.3 million in AUM and charges 75 bps in annual fees from investors.
This ETF offers global exposure to solar stocks by tracking the MAC Global Solar Energy Index. U.S. firms dominate the fund’s portfolio with nearly 45.6% share, followed by China (23.3%) and Germany (8.1%). The product has amassed $505.3 million in its asset base and charges investors 71 bps in fees per year. It has a Zacks ETF Rank #2 (Buy) (read: Best ETFs to Combat Climate Change).
With AUM of $139.8 million, this ETF provides investors access to social media companies around the world. It tracks the Solactive Social Media Total Return Index, holding 43 securities in the basket. The ETF charges 0.65% in annual fees and has a Zacks ETF Rank #3 (Hold) with a High risk outlook.
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