U.S. markets close in 35 minutes

Top-Ranked ETFs Crushing the Market YTD

Sweta Killa

Braving all the woes, the Wall Street has been on smooth ride with the major indices near all-time highs once again. Trade war escalation, recession fears, Brexit and geopolitical tensions have been unable to stop the bulls.   

This can be primarily attributed to hopes of monetary stimulus globally and renewed trade optimism. Major central banks across the globe are taking steps to prop up slowing economic growth that have eased global recession concerns and in turn lifted investors’ confidence (read: 5 Ultra-Cheap Growth ETFs to Tap on Global Stimulus Hopes).

In particular, the Fed cut interest rates at July-end for the first time since the financial crisis, instilling strong confidence in the stock market. Lower interest rates make borrowings cheaper, providing a boost to both investment in new projects and repayment of higher-rate debt. Consequently, it leads to strong economic growth and is thus a boon for the stock market.

Additionally, the latest bout of upbeat data pointing to increase in inflation, higher consumer and business confidence as well as retail sales, underscores the strength of the economy.  Recovery in the U.S. housing market and the wave of mergers and acquisitions added to the strength.

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 of 2019 so far that are likely to continue outperforming as these have potentially superior weighting methodologies and a solid Zacks ETF Rank #2 (Buy).

SPDR S&P Semiconductor ETF XSD – Up 46%

This ETF offers exposure to the semiconductor corner of the broad tech sector. It tracks the S&P Semiconductor Select Industry Index, holding 35 stocks in its portfolio with none accounting for more than 4% share. The fund has AUM of $342.6 million and charges 35 bps in fees per year. It trades in average daily volume of 125,000 shares (read: After Upbeat July, Will Semiconductor ETFs Slump in August?).

SPDR S&P Aerospace & Defense ETF XAR – Up 42.5%

XAR offers equal-weight exposure to the companies in the aerospace & defense segment. It follows the S&P Aerospace & Defense Select Industry Index and holds 29 stocks in its basket with none making up for more than 4.7% of the assets. The fund has been able to manage $1.8 billion in its asset base, while trading in average daily volume of around 112,000 shares. It charges 35 bps in annual fees (read: Saudi Oil Attack: Sector ETF Winners and Losers).

iShares PHLX Semiconductor ETF SOXX – Up 39.7%

This ETF follows the PHLX SOX Semiconductor Sector Index and offers exposure to 30 U.S. firms with heavy concentration on top five holdings. The fund has amassed $1.8 billion in its asset base and trades in volume of about 749,000 shares a day. It charges a fee of 46 bps a year from investors (read: 5 ETFs Surge With Wall Street on Trade Talk Hopes).

Invesco DWA Technology Momentum ETF PTF – Up 37.6%

This fund follows the Dorsey Wright Technology Technical Leaders Index and provides exposure to technology companies that are showing relative strength (momentum). Holding 39 stocks in the basket, it is well diversified with each constituting less than 5.3% share. The product is illiquid and relatively unpopular with AUM of $251.6 million and average daily volume of 50,000 shares.

iShares U.S. Aerospace & Defense ETF ITA – Up 34.2%

This fund provides investors exposure to U.S. companies that manufacture commercial and military aircraft and other defense equipment by tracking the Dow Jones U.S. Select Aerospace & Defense Index. Holding 33 stocks, the fund is highly concentrated on the top two firms. The fund has AUM of nearly $5.6 billion and charges 42 bps in fees a year. Volume is good at around 161,000 shares (read: Aerospace & Defense ETF Hits New 52-Week High).

Invesco DWA Industrials Momentum ETF PRN – Up 32.8%

This fund provides exposure to companies in the industrial sector that are showing relative strength (momentum). It follows the Dorsey Wright Industrials Technical Leaders Index and holds 37 stocks in its basket with none accounting for more than 4.5% share. The fund has amassed $107.5 million in its asset base and charges 60 bps in annual fees. It trades in average daily volume of 8,000 shares.

First Trust NASDAQ-100 Technology Sector Index Fund QTEC – Up 32.7%

This ETF follows the NASDAQ-100 Technology Sector Index, holding 39 stocks in its basket with each accounting for less than 4% of the assets. It has amassed $2.5 billion in its asset base while trading in average daily volume of 194,000 shares. The fund charges 57 bps in annual fees.

Want key ETF info delivered straight to your inbox?

Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week. Get it free >>