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These 3 ETFs Have Crushed It in 2019

Dan Caplinger, The Motley Fool

The first quarter of 2019 is over, and it's been a huge boon for stock market investors. Major market benchmarks like the Dow Jones Industrials and S&P 500 posted double-digit percentage gains for the first three months of the year, and despite some concerns about a possible economic slowdown, many market participants are more optimistic than ever about the long-term prospects for the market.

You'll find hundreds of exchange-traded funds with positive returns so far this year, especially those that take big bets on market sectors by using leverage. However, even among unlevered ETFs, you'll find a lot of impressive gains. The table below shows you three of the best-performing ETFs so far in 2019, and we'll take a closer look at them to see whether they have more room to run for the remainder of the year.

The 1st quarter's top ETFs

ETF

Assets Under Management

YTD Return

ETFMG Alternative Harvest (NYSEMKT: MJ)

$1.22 billion

46%

ARK Genomic Revolution Multi-Sector (NYSEMKT: ARKG)

$394 million

37%

Xtrackers Harvest CSI 300 China A-Shares (NYSEMKT: ASHR)

$2.24 billion

31%

Data source: Fund companies, ETFdb.com. Includes only non-leveraged ETFs with assets of $100 million or more.

Investors make the cannabis connection

Marijuana stocks have soared so far in 2019, rebounding sharply from a disappointing end to 2018. That's been a huge boon for ETFMG Alternative Harvest, which includes among its holdings the top prospects among cannabis growers, distributors, and supporting companies. Having just pushed through the $1 billion mark in assets early in the quarter, Alternative Harvest is finding that new investors are flooding in at the same time that the value of the stocks in its portfolio has also climbed.

The cannabis industry is soaring on hopes that rising demand for a wide variety of products will remain on a steep upslope for the foreseeable future. Between the opening of the Canadian recreational market last October, the subsequent legalization of hemp and hemp-based products in the U.S. in December, and a host of worldwide developments toward greater acceptance, there's no clear end in sight for Alternative Harvest to capitalize on this explosive sector.

White mosaic squares spelling ETF on a yellow mosaic background.

Image source: Getty Images.

Genomics take root

Elsewhere, companies that are merging healthcare and technology in the pursuit of genomic-based treatments have shown a lot of promise lately. Advances in areas like stem-cell research, targeted therapies, bioinformatics, and CRISPR-based systems have vaulted share prices of leading businesses much higher, and the industry is still in the early stages of discovering all the potential benefits available.

The ARK Genomic Revolution ETF has taken advantage of the interest in genomic stocks. Top holding Invitae has more than doubled in price as its genetic tests and counseling services for various health conditions has resonated with investors, while genomic lung-cancer test provider Veracyte has also seen its stock nearly double in just three months. As science, technology, biological knowledge, and healthcare practice all advance, genomics stocks stand to benefit, and that should help ARK Genomic Revolution's long-term results.

A Chinese bounce

Finally, Chinese stocks have bounced back from poor performance late in 2018, and the Xtrackers Harvest CSI 300 China A Shares ETF has enjoyed a nice rebound. After posting double-digit percentage losses in the fourth quarter of 2018, the Xtrackers ETF's early 2019 performance has helped it regain nearly all the ground it lost throughout last year.

Although most U.S. investors focus on the Chinese internet and e-commerce companies that get the most exposure internationally, it's largely strong performance from China's major financial institutions that has helped lift the Xtrackers ETF up from sharp declines in 2018. Investors still aren't certain whether the trade disputes between China and the U.S. will continue, but the Chinese stock market has reacted favorably whenever good news comes from the negotiation table. If the two countries can reach agreement on tariffs and other trade issues, then it could mean even further upside for China's stocks -- and for this fund.

These ETFs have a spring in their step

As winter draws to a close, these three ETFs have been highly rewarding to their shareholders. Each of them still has room to deliver better returns, but it'll take extremely favorable conditions in each of their respective industries for them to come close to matching the gains they've enjoyed during the first three months of the year.

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Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.