The S&P 500 continued its flirtation with the
psychologically important 1,600 level Thursday with a gain of
almost one percent. Including dividends paid, the benchmark U.S.
index is up more than 12 percent year-to-date.
To this point, the rally in U.S. stocks has mainly one of the
risk off variety as
conservative, lower beta sectors
have driven stocks higher. Along those lines, it may not be
surprising that only a small mount of
are up 20 percent to 25 percent this year.
To be precise, the number is 27, although the number of ETFs
and ETNs that have gained 25 percent or more is 46,
according to Bloomberg data
. Those figures include leveraged funds, implying that the hunt
for plain vanilla sector ETFs with big year-to-date gains is
tricky. There are few that fit bill and this the following ETFs
have additional upside potential through the rest of 2013.
PowerShares Dynamic Media Portfolio (NYSE:
) At the end of last year, PBS was
touted as one sector ETF
to keep an eye on this year. The advice has proven quite
profitable as the ETF has gained just over 20 percent.
One sign that PBS may have some more upside is that despite
its stellar performance, one that has seen the ETF surge 35.1
percent in the past 12 months, the fund is not particularly large
with just $150.4 million in assets under management.
Investors should note this is not just an old school media or
cable net heavy ETF. PBS offers some exposure to growth stocks
such as Netflix (NASDAQ:
) and Google (NASDAQ:
). The growth/discretionary nature of PBS's lineup gives the ETF
a P/E ratio of 18.3
compared to 14.3 for the SPDR S&P 500 (NYSE:
Market Vectors Biotech ETF (NYSE:
) Three of the four largest biotech ETFs have gained more than 20
percent year-to-date and that group is lead by the smallest of
the big four of biotech ETFs: BBH. BBH has surged 29.1 percent
year-to-date, putting it well ahead of its primary rivals.
Investors appear to be realizing that BBH is the leader of the
pack. On March 15,
the ETF had just under $205 million in assets
. Six weeks later, that total is nearly $297 million as investors
have been flocking to biotech shares due to the group's
insulation from global macroeconomic issues.
Each biotech ETF goes about its business a little bit
differently than the others. With BBH that means a heavy focus on
the biotech sector's four horsemen: Amgen (NASDAQ:
), Biogen (NASDAQ:
), Celgene (NASDAQ:
) and Gilead (NASDAQ:
). In order, Amgen, Gilead, Celgene and Biogen combine for nearly
47 percent of BBH's weight.
First Trust Consumer Staples AlphaDEX Fund (NYSE:
) Most folks would be happy with the average year-to-date return
of 17.7 percent offered by the Consumer Staples Select Sector
) and the Vanguard Consumer Staples ETF (NYSE:
). Well, as long as they did not know that the First Trust
Consumer Staples AlphaDEX Fund is up 20.6 percent year-to-date,
they would be happy.
Those are all stellar performances in a short amount of time
for a supposedly slow-moving sector, but FXG represents a unique
case. This is not a run-of-the-mill cap-weighted staples ETF
heavy on Procter & Gamble (NYSE:
) and Coca-Cola (NYSE:
). Since the AlphaDEX methodology uses growth and value factors
to weight index constituents rather than focusing on market cap,
FXG is more volatile than the average staples ETF.
FXG has a three-year standard deviation of 13 percent compared
to 10.1 percent for the S&P 500 Consumer Staples Index. The
ETF also has a beta of 1.03 against the S&P 500,
according to First Trust data
Still, it is hard to argue with the returns and ETF industry
inflow data for April
suggest investors are warming to alternative
For more on ETFs, click
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