10 Best Performing ETFs in 2022
In this article, we discuss 10 best performing ETFs in 2022. If you want to see more ETFs in this selection, check out 5 Best Performing ETFs in 2022.
Traders looking to buy the dip could consider investing in ETFs that continue to offer exposure to legacy large-cap firms. In 2022, safe haven assets and defensive sectors like utilities, healthcare, consumer staples, and gold have been performing comparatively better compared to the overall US market.
Despite the stock and bond markets slipping significantly this year, the United States had record trading volume and the second largest flows and new launches of exchange traded funds. Retail investors are rather eager about tech stocks heading into 2023, which is a positive catalyst for related ETFs as well. According to a new survey of over 2,000 retail investors across Europe, Asia, and the United States by London-based investing insights platform Finimize, just 1% of retail investors plan to divest their investments in the next year, while 65% will keep on investing and 29% intend to enhance their portfolios. Max Rofagha, Finimize’s CEO, told the press on December 8:
“This data is proof that even in the current market environment, the majority are seeing volatility simply as part of the economic cycle thanks to access to information and growing experience with investing.”
About 64% of the retail traders from the survey plan to back Big Tech names like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG). It is convenient to get exposure to old-economy stocks via ETF investing.
Our Methodology
We selected the following ETFs based on positive share price gains year-to-date as of December 9. These exchange traded funds were ranked according to their share price gains. We have discussed these ETFs in terms of their largest holdings, net assets, expense ratios, and benchmark indices.
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Best Performing ETFs in 2022
10. Invesco Dynamic Energy Exploration & Production ETF (NYSE:PXE)
YTD Share Price Gain as of December 9: 40.38%
Invesco Dynamic Energy Exploration & Production ETF (NYSE:PXE) is based on the Dynamic Energy Exploration & Production Intellidex Index. The ETF invests at least 90% of its total assets in the securities that comprise the benchmark, which evaluates companies based on a merit criteria including price momentum, earnings momentum, quality, management action, and value. The index comprises securities of 30 U.S. companies specializing in the exploration and production of natural resources used to produce energy. As of December 9, Invesco Dynamic Energy Exploration & Production ETF (NYSE:PXE)’s 30-day SEC yield stood at 2.47% and the average market cap came in at nearly $25 billion. The ETF offers an expense ratio of 0.63%.
Phillips 66 (NYSE:PSX) is the largest holding of Invesco Dynamic Energy Exploration & Production ETF (NYSE:PXE). Phillips 66 (NYSE:PSX) operates as an energy manufacturing and logistics company in the United States. The company was founded in 1875 and is headquartered in Houston, Texas. On December 9, Phillips 66 (NYSE:PSX) disclosed a $2 billion capital budget for FY 2023, including 50% of planned $1.1 billion in growth capital supporting low-carbon initiatives, compared to 45% allocated in the company's 2022 plan.
According to Insider Monkey’s data, 34 hedge funds were bullish on Phillips 66 (NYSE:PSX) at the end of Q3 2022, compared to 38 funds in the last quarter. D E Shaw is the largest stakeholder of the company, with 3.10 million shares worth $250.3 million.
Like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), Phillips 66 (NYSE:PSX) is one of the best stocks to consider for a well rounded portfolio.
9. ProShares UltraShort Real Estate (NYSE:SRS)
YTD Share Price Gain as of December 9: 45.06%
ProShares UltraShort Real Estate (NYSE:SRS) seeks to track daily investment results that correspond to two times the inverse (-2x) of the daily performance of the Dow Jones U.S. Real EstateSM Index. ProShares UltraShort Real Estate (NYSE:SRS) was founded on January 30, 2007 and the fund offers a gross expense ratio of 1.41%. ProShares UltraShort Real Estate (NYSE:SRS) invests in the Equity Real Estate Investment Trusts, Real Estate Management & Development, Professional Services, and Mortgage Real Estate Investment Trusts sectors. With share price up 45% year-to-date as of December 9, it is one of the best performing ETFs in 2022.
ProShares UltraShort Real Estate (NYSE:SRS)’s top holding is American Tower Corporation (NYSE:AMT), which is one of the largest global REITs with a portfolio of multi-tenant communications real estate sites. On December 8, American Tower Corporation (NYSE:AMT) declared a $1.56 per share quarterly dividend, a 6.1% increase from its prior dividend of $1.47. The dividend is payable on February 2, 2023 to shareholders of record on December 28, 2022.
According to Insider Monkey’s data, 62 hedge funds were long American Tower Corporation (NYSE:AMT) at the end of September 2022, up from 52 funds in the prior quarter. Charles Akre’s Akre Capital Management is the largest position holder in the company, with nearly 7 million shares worth $1.5 billion.
Here is what Baron Real Estate Fund has to say about American Tower Corporation (NYSE:AMT) in its Q2 2022 investor letter:
“American Tower is a leading global tower company with 220,000 communication sites globally and over 40,000 in the U.S. We added to our position during the market dislocation and as it became increasingly clear that the company would put permanent equity financing in place at better-than-expected terms for its previously announced acquisition of CoreSite (thereby removing the “equity overhang”).
In addition, the company stepped back from a large potential deal in Europe, which would have required significant incremental funding, due to unfavorable contract terms and price. This decision further reinforced our confidence in management’s capital allocation discipline knowing that these were highly sought-after assets.”
8. Direxion Daily MSCI Emerging Markets Bear 3X Shares (NYSE:EDZ)
YTD Share Price Gain as of December 9: 45.93%
Direxion Daily MSCI Emerging Markets Bear 3X Shares (NYSE:EDZ) seeks to track daily investment results or 300% of the inverse of the performance of the MSCI Emerging Markets IndexSM. The benchmark is a free float-adjusted market capitalization weighted index that represents the performance of large and mid-capitalization securities across emerging markets. Direxion Daily MSCI Emerging Markets Bear 3X Shares (NYSE:EDZ) offers an expense ratio of 1.28%. It invests primarily in China, India, Taiwan, Korea, and Brazil, among others.
Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the largest position in Direxion Daily MSCI Emerging Markets Bear 3X Shares (NYSE:EDZ)’s portfolio. Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) is the largest semiconductor company in the world. On December 9, the company reported that November net revenue came in at approximately NT$222.71 billion, up 5.9% from October and up 50.2% year-over-year.
According to Insider Monkey’s Q3 data, 87 hedge funds were bullish on Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM), up from 72 funds in the prior quarter. Warren Buffett’s Berkshire Hathaway held the leading stake in the company, consisting of 60 million shares worth over $4 billion.
Baron Funds made the following comment about Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) in its Q3 2022 investor letter:
“Semiconductor giant Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) detracted from performance due to the global macroeconomic slowdown and softening demand for consumer electronics. We retain conviction that Taiwan Semi’s technological leadership, pricing power, and exposure to secular growth markets, including high-performance computing, automotive, and IoT, will allow the company to deliver strong revenue growth over the next several years.”
7. ProShares UltraShort Technology (NYSE:REW)
YTD Share Price Gain as of December 9: 52.20%
ProShares UltraShort Technology (NYSE:REW) seeks daily investment results that correspond to two times the inverse (-2x) of the daily performance of the Dow Jones U.S. TechnologySM Index, which measures the performance of the technology sector of the U.S. equity market. The fund offers a gross expense ratio of 2.26%. It primarily invests in the Software & Services, Technology Hardware & Equipment, Semiconductors & Semiconductor Equipment, and Media & Entertainment sectors. ProShares UltraShort Technology (NYSE:REW) has 164 stocks in its portfolio.
Apple Inc. (NASDAQ:AAPL) is the top holding of ProShares UltraShort Technology (NYSE:REW). On December 9, Apple Inc. (NASDAQ:AAPL) and Ericsson announced that they have entered a global patent cross license agreement for the latter's patented cellular standard essential technologies. Ericsson and Apple Inc. (NASDAQ:AAPL) have agreed to solidify their business collaboration, in terms of technology, interoperability, and standards development.
According to Insider Monkey’s data, Apple Inc. (NASDAQ:AAPL) was part of 140 hedge fund portfolios at the end of Q3 2022, compared to 128 in the earlier quarter. Warren Buffett’s Berkshire Hathaway held the largest position in the company, with approximately 895 million shares worth $123.6 billion.
Here is what Wedgewood Partners specifically said about Apple Inc. (NASDAQ:AAPL) in its Q3 2022 investor letter:
“Apple Inc. (NASDAQ:AAPL) grew revenues +5% (foreign exchange adjusted and excluding Russia) driven by record iPhone revenues that were up about +3% on an exceptional year ago comparison of +50%. Apple’s installed base is over 1.8 billion devices which helps drive a software and services business that has generated almost $80 billion of revenue over the past 4 quarters. As we have highlighted in the past, Apple’s relentless focus on the development and integration between hardware (especially ICs) as well as software, continues to add significant value for customers of its products and services. We expect this favorable competitive dynamic to continue for the foreseeable future.”
6. Direxion Daily Real Estate Bear 3X Shares (NYSE:DRV)
YTD Share Price Gain as of December 9: 54.71%
Direxion Daily Real Estate Bear 3X Shares (NYSE:DRV) seeks daily investment results or 300% of the inverse of the performance of the Real Estate Select Sector Index. The benchmark includes companies from sectors such as real estate management, real estate development, and real estate investment trusts. The fund offers an expense ratio of 0.96%. Direxion Daily Real Estate Bear 3X Shares (NYSE:DRV) is one of the best performing ETFs in 2022, with shares up nearly 55% year-to-date as of December 9.
Prologis, Inc. (NYSE:PLD) is a prominent holding of Direxion Daily Real Estate Bear 3X Shares (NYSE:DRV). It is a global leader in logistics real estate with a focus on high-growth markets. Prologis, Inc. (NYSE:PLD) serves business-to-business and retail/online fulfillment customers. On December 8, the company declared a quarterly dividend of $0.79 per share, in line with previous. The dividend is payable on December 30, to shareholders of record on December 19.
Among the hedge funds tracked by Insider Monkey, Prologis, Inc. (NYSE:PLD) was part of 59 public stock portfolios at the end of Q3 2022, compared to 49 in the prior quarter. Jeffrey Furber’s AEW Capital Management is the leading position holder in the company, with 2.5 million shares worth $253.6 million.
In addition to Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG), Prologis, Inc. (NYSE:PLD) is one of the top stocks favored by smart investors.
Baron Funds made the following comment about Prologis, Inc. (NYSE:PLD) in its Q3 2022 investor letter:
“Prologis, Inc. (NYSE:PLD) is the world’s largest industrial REIT. The company owns a high-quality real estate portfolio that is concentrated in major global trade markets and large population centers across the Americas, Europe, and Asia. Prologis has an unmatched global platform, strong competitive advantages (scale, data, and technology), and attractive embedded growth prospects. The company is the only industrial REIT with an ‘A’ credit rating.
Following a year-to-date decline in its shares of approximately 40%, we believe Prologis’ current valuation of only 22 times cash flow (adjusted funds from operations or “AFFO”) and a 4.6% implied capitalization rate is compelling given that the company’s rents on its in-place leases are more than 50% below current market rents, thus providing a strong runway for growth in the next three to five years.
In the third quarter, we acquired additional shares of Prologis, Inc., the world’s largest industrial REIT. We are big fans of CEO Hamid Moghadam and Prologis’ management team and remain optimistic about the company’s long-term growth prospects…” (Click here to read the full text)
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Disclosure: None. 10 Best Performing ETFs in 2022 is originally published on Insider Monkey.
