Top-Performing ETFs of the First Nine Months of 2019
The year 2019 so far has been kind to the U.S. stock market, despite a myriad of woes such as lingering trade woes, recession fears, geopolitical tension and Brexit issues.
This is especially true against the backdrop of global easy money policies as well as steady economic growth. Notably, the latest upbeat data pointing to increase in inflation, higher consumer and business confidence, retail sales as well as increase in manufacturing activity, underscore the strength of the economy.
The Fed slashed interest rates for the second time since the financial crisis by 25 bps to 1.75-2% in its policy meeting to sustain a decade-long economic expansion. 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 to the stock market (read: Sector ETFs, Stocks Set to Explode After Another Rate Cut).
Additionally, major central banks across the globe are also taking steps to prop up slowing economic growth that have eased global recession concerns and in turn lifted investors’ confidence. Further, the progress in U.S.-China trade talks supported the rally.
While there have been winners in many corners of the space, we highlight six ETFs that have outperformed and gained more than 40% in the first nine months of 2019. These are expected to continue outperforming, provided the fundamentals remain intact.
Invesco Solar ETF TAN – Up 67.8%
This ETF, which offers global exposure to 22 solar stocks, has emerged as an undisputed winner this year given strong solar installation, a rebound in global solar demand, California’s push to make solar panels and competitive pricing. American firms dominate the fund’s portfolio with nearly 48% share, followed by China (26.3%) and Germany (7.1%). The product has amassed $470.8 million in its asset base and trades in average daily volume of 218,000 shares. It charges investors 70 bps in fees per year and has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: Solar ETF Hits New 52-Week High).
iShares MSCI Global Gold Miners ETF RING – Up 47.7%
Gold has been on a tear as trade tensions triggered safe-haven demand and cheap money flows pushed the dollar down against a basket of currencies. Acting as a leveraged play on the underlying metal prices, metal miners tend to experience more gains than their bullion cousins in a rising metal market. While most of the ETFs have been rising, RING is leading the way higher. This ETF follows the MSCI ACWI Select Gold Miners Investable Market Index and holds 35 securities in its portfolio. Canadian firms take half of the portfolio, while the United States, Australia and South Africa round out the top four with double-digit exposure each. RING charges 39 bps in fees and expenses. It has been able to manage assets worth $338.9 million and trades in good volume of 243,000 shares per day.
Sprott Gold Miners ETF SGDM: Up 44.2%
This fund follows the Solactive Gold Miners Custom Factors Index, holding 31 stocks in its basket. Here again, Canada takes the top spot at 73.5% followed by 19.2% in the United States and 3.9% in Australia. The fund has amassed $197.5 million in its asset base and trades in moderate volume of around 63,000 shares a day. It charges 50 bps in annual fees from investors (read: How to Bet on Gold Surge With ETFs & Stocks).
Invesco WilderHill Clean Energy ETF PBW – Up 43%
This product, powered by a solar surge, provides exposure to 37 U.S. companies engaged in the business of advancement of cleaner energy and conservation. It has AUM of $191.5 million and expense ratio of 0.70%. The ETF trades in average daily volume of 38,000 shares (read: Clean Energy ETFs Riding Higher).
SPDR S&P Semiconductor ETF XSD – Up 41.5%
This ETF, which offers exposure to the semiconductor corner of the broad tech sector, has been rising on trade deal optimism. It tracks the S&P Semiconductor Select Industry Index, holding 35 stocks in its portfolio. The fund has AUM of $330.8 million and charges 35 bps in fees per year. It trades in average daily volume of 125,000 shares and has a Zacks ETF Rank #2 (Buy) with a High risk outlook (read: Top-Ranked ETFs Crushing the Market YTD).
iShares U.S. Home Construction ETF ITB – Up 41.4%
The decline in mortgage rates and slower home price growth have been fueling growth in the homebuilding segment. This fund provides exposure to U.S. companies that manufacture residential homes by tracking the Dow Jones U.S. Select Home Construction Index. With AUM of $1.2 billion, it holds a basket of 45 stocks. The product charges 42 bps in annual fees and trades in heavy volume of around 2.2 million shares a day on average. It has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: Here's Why Homebuilding ETFs Are Soaring).
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Sprott Gold Miners ETF (SGDM): ETF Research Reports
Invesco WilderHill Clean Energy ETF (PBW): ETF Research Reports
Invesco Solar ETF (TAN): ETF Research Reports
iShares MSCI Global Gold Miners ETF (RING): ETF Research Reports
SPDR S&P Semiconductor ETF (XSD): ETF Research Reports
iShares U.S. Home Construction ETF (ITB): ETF Research Reports
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