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Top-Ranked ETFs That Crushed S&P 500 in the Bull Market

Sweta Killa

The bull market is now eight years old. After hitting a bear-market bottom of 676.53 on March 9, 2009, the S&P 500 was on a stellar ride outplaying a host of challenges including debt crisis, government shutdown, the Middle East conflict, geopolitical tension, Greece turmoil, China’s soft landing issues, Japan’s recession, a global slowdown, Brexit and the oil price carnage (read: A Trip to 8-Year Bull Run: What's Up, What's Down).

In fact, the benchmark gained nearly 249% over the eight-year period with just four corrections (a decline of 10% or more); the last being witnessed in the beginning of 2016. Most of these gains were driven by cheap money flows, lower interest rates, and global monetary easing policies.

Additionally, the U.S. emerged as a healthier economy dodging the financial crisis and the Great Recession, with GDP growth rising to 1.9% in the fourth quarter of 2016 from a contraction of 5.7% seen in March 2009. The unemployment rate has fallen to 4.8% currently from 10% in October 2009. Additionally, Americans have an optimistic view of the economy with confidence hitting the highest level in more than 15 years.

Further, the combination of other factors like return to the earnings growth era, the jump in oil price, Trump effect, and the prospect of higher interest rates added to the most recent rally (read: 7 ETFs Offering 20% Plus Returns Since Election).

While there have been winners in every corner of the space, several ETFs have easily crushed the S&P 500 by wide margins. Below, we have presented a bunch of top performing ETFs of the Bull Market that will continue to outperform in the coming months given that these have a solid Zacks ETF Rank of 1 (Strong Buy) or 2 (Buy).

Vanguard Consumer Discretionary ETF VCR – Up 395%

This fund targets the consumer discretionary sector and follows the MSCI U.S. Investable Market Consumer Discretionary 25/50 Index. It holds 384 stocks in its basket with AUM of $2.1 billion. VCR is the low choice in the space, charging just 10 bps in annual fees while volume is moderate at nearly 89,000 shares a day. The product has a Zacks ETF Rank of 2.

iShares U.S. Aerospace & Defense ETF ITA – Up 388.9%

This fund offers exposure to 39 U.S. companies that manufacture commercial and military aircraft and other defense equipment. It follows the Dow Jones U.S. Select Aerospace & Defense Index and charges 44 bps in fees per year. The fund has accumulated $2.5 billion in AUM and trades in good volume of around 232,000 shares. It has a Zacks ETF Rank of 1 (read: Trump's Defense Spending Plans Make these ETFs Buys Again).

Guggenheim S&P SmallCap 600 Pure Growth ETF RZG – Up 364.4%

This fund targets the small cap growth segment of the broader U.S. market. It tracks the S&P SmallCap 600 Pure Growth Index, holding 151 securities in its basket. The product charges investors 35 bps in annual fees. It has amassed $176.9 million in its asset base while trades in a paltry volume of about 10,000 shares a day on average. The product has a Zacks ETF Rank of 1.

PowerShares FTSE RAFI US 1500 Small-Mid Portfolio PRFZ – Up 359.1%

This product tracks the FTSE RAFI US 1500 Small-Mid Index, holding a broad basket of 1386 securities. It has amassed $1.6 billion in its asset base but trades in a lower average daily volume of 35,000 shares. Expense ratio comes in at 0.39%. PRFZ has a Zacks ETF Rank of 2.
 
PowerShares QQQ QQQ – Up 335.9%

This ETF provides exposure to the 107 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq-100 Index. QQQ is one of the largest and the most popular ETF in the large cap space with AUM of $45.4 billion and average daily volume of around 22 million shares. It charges investors 20 bps in annual fees and has a Zacks ETF Rank of 1.

iShares PHLX Semiconductor ETF SOXX – Up 335.3%

This ETF follows the PHLX SOX Semiconductor Sector Index and offers exposure to 30 semiconductor firms. It has amassed $803.1 million in its asset base and trades in solid average volume of around 522,000 shares a day. The product charges 48 bps in fees a year from investors and has a Zacks ETF Rank of 1 (read: Semiconductor ETFs Riding High on Q4 Earnings).

First Trust NASDAQ-100 Equal Weighted Index Fund QQEW – Up 332.5%
 
Holding 107 stocks, the fund provides equal exposure to stocks of the Nasdaq-100 Index. The fund has amassed $453.5 million in its asset base while it trades in lower volumes of nearly 50,000 shares a day on average. It charges 60 bps in annual fees and has a Zacks ETF Rank of 1.

Guggenheim S&P 500 Pure Growth ETF RPG – Up 332%

This ETF offers exposure to the growth corner of the broad market by tracking the S&P 500 Pure Growth Index. It holds 115 securities in its basket with none accounting for more than 2.8% of total assets. Here again, technology is the top sector with 30% allocation, followed by double-digit exposure each in consumer discretionary, industrials and healthcare. The fund has amassed $1.9 billion in its asset base and trades in good volume of 123,000 shares a day on average. Expense ratio came in at 0.35%. The ETF has a Zacks Rank of 2.

Oppenheimer Financials Sector Revenue ETF RWW – Up 323.8%

This ETF offers investors targeted access to the same stocks as the S&P 500 Financials Index but weighed each security by revenue instead of by market capitalization. It holds 63 stocks in its basket with a large exposure to Berkshire Hathaway at 16.1% while other firms hold no more than 7.01% of assets. The product failed to garner investors’ attention as depicted by its AUM of $33.6 million and average daily volume of 5,000 shares. It charges 0.49% in expense ratio and has a Zacks ETF Rank of 2.

iShares U.S. Insurance ETF IAK – Up 308.7%

With AUM of $159.6 million, this product provides exposure to 61 companies that provide life, property and casualty, and full line insurance by tracking the Dow Jones U.S. Select Insurance Index. It charges 44 bps in annual fees and trades in light volume of 23,000 shares per day. IAK has a Zacks ETF Rank of 2 (read: Insurance ETFs Leading Financial Sector in Q4 Earnings).

First Trust Large Cap Core AlphaDEX Fund FEX – Up 267.7%

The fund follows an AlphaDEX methodology and ranks stocks in the space by various growth and value factors, eliminating the bottom ranked 25% of the stocks. This approach results in a basket of 375 stocks that are well spread out across each security with none holding more than 0.54% of assets. Sector wise, the product is diversified with consumer discretionary, financials, information technology, and industrials making up for the top four sectors. FEX is rich in AUM of $1.5 billion and sees good volume of around 144,000 shares a day. It charges 61 bps in annual fees and has a Zacks ETF Rank of 2.

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