A Trio of ETFs Sitting on 30% Gains This Year
For as good as U.S. equities have been this year, and they have been quite good broadly speaking, finding an abundance of ETFs that are up 30% or more year-to-date is difficult.
The job is made even harder when excluding ETFs that track Japan, one developed market that has outperformed the U.S. despite Thursday’s massive sell-off. [Japan ETFs Tumble]
With enough diligence and homework, finding a few compelling options in the 30%+ club is possible.
Fortunately, the reasons behind these stellar gains are not hard to put into words and may provide insight for what these funds have in store for the rest of 2013. Include among the following ETFs are some familiar names, small funds and at least one that has recently been growing at an impressive clip.
First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN)
This is how strong QCLN has been this year: Even with Wednesday’s 3.3% dip, the ETF is still up 39.61% year-to-date.
Clean energy fans can debate the reasons why QCLN has been a shining star this. Solar stocks have chipped in on the ETF’ surge, but when evaluating QCLN’s holdings, one thing jumps out at investors: A 15.2% weight to Tesla (TSLA).
QCLN is “the Tesla ETF” and that is a good moniker to have these days. [ Tesla Surge Buoys Inflows to Green Energy ETF ]
Market Vectors Biotech ETF (BBH)
An accommodating U.S. Food & Drug Administration coupled with the biotech sector’s durability in the face of global macroeconomic headwinds have bolstered BBH and rival funds this year. The ETF, which is heavily allocated to the largest biotech stocks such as Amgen (AMGN) and Gilead Sciences (GILD), is up more than 31% year-to-date.
More gains could be on the way as there are currently 39 new therapies that have been approved by the FDA last year, paving the way for treatments to roll out ahead of scheduled dates this year. [Positive Prognosis For Biotech ETFs]
Market Vectors Indonesia Small-Cap ETF (IDXJ)
By far the smallest ETF on this list (home to just $11.1 million in assets), the Market Vectors Indonesia Small-Cap may be a niche ETF, but it has also been a stellar ETF in 2013. Indonesian small-caps may not be the first destination investors think of when it comes to smaller emerging markets equities … at least not yet.
Indonesia, Southeast Asia’s largest economy, has seen its equities rebound in 2013 after a disappointing 2012 and IDXJ has benefited in a big way with gain of almost 33%. By comparison, the equivalent Brazil small-cap ETF has lost 7% this year while the comparable China small-cap ETF is up a mere 2%. [Indonesia ETFs Ride Growth Wave]
A gain of almost 33% might imply that the valuations on IDXJ are stretched.
That may not be the case as the ETF sported a P/E ratio of less than 15 and a price-to-book ratio of 1.2 at the end of April, according to Market Vectors data. On the other hand, the iShares MSCI Indonesia Investable Market Index Fund (EIDO) has P/E of 20 and a price-to-book ratio of almost five.
ETF Trends editorial team contributed to this story.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.
