First-quarter earnings season has come to a close. And while corporate profits were down for the second consecutive quarter, nearly four out of five stocks on Wall Street beat analyst expectations for Q1. The result is a strange environment where there continues to be negativity among investors about growth prospects, but stocks continue to rise all the same thanks to stocks beating chronically low expectations.
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Not all investments are created equal, however, and some companies certainly have stumbled in 2023. And of course, past performance is no guarantee of future returns — so what has been working recently may not be your best bet going forward.
You should always do your own investment research and make trades based on your personal investing goals. But for most playing the market right now, one of these top seven exchange-traded funds, or ETFs, probably fits into your portfolio nicely if you’re looking to make a change:
| ETF | YTD performance as of June 2 |
| Vanguard Mega Cap Growth ETF (ticker: MGK) | 31.4% |
| Invesco QQQ Trust (QQQ) | 33.4% |
| Global X Robotics & Artificial Intelligence ETF (BOTZ) | 37.3% |
| Ark Innovation ETF (ARKK) | 33.2% |
| Global X MSCI Greece ETF (GREK) | 28.8% |
| Pimco Enhanced Short Maturity Active ETF (MINT) | 2.5% |
| iShares Gold Trust (IAU) | 6.8% |
Vanguard Mega Cap Growth ETF (MGK)
Major indexes are trending higher in 2023, but the “breadth” of the market — that is, the number of stocks that are up versus the ones that are down — isn’t particularly impressive. In fact, of the 500 stocks in the S&P 500, only 222 were up more than 1% as of the end of May. So how can the broader index be up more than 9% since Jan. 1 then? It’s because the S&P 500 is heavily reliant on the largest stocks, like trillion-dollar tech giants and mega-cap blue chips. So if you want to cut out the little guys and just rely on the big, leading companies, go right for MGK. After all, this fund is up 31.4% so far this year (as of June 2) — dwarfing the returns of the broader S&P 500 in the same period.
Invesco QQQ Trust (QQQ)
In this volatile market, it’s a story of haves and have-nots on Wall Street. And the “haves” are definitely tech stocks lately. Just look at Nvidia Corp. (NVDA), which soared an amazing 36% in May alone on high hopes for its artificial intelligence chips. Meanwhile, other areas of the market, such as regional banks, have been melting down. The QQQ is benchmarked to the Nasdaq-100, a list of the largest U.S. corporations, and unsurprisingly is very tech-heavy, with about 51% of assets in this sector. Top holdings include mega-cap stocks Apple Inc. (AAPL), Alphabet Inc. (GOOG, GOOGL) and the aforementioned Nvidia. If you want to ride the rise in technology stocks, look to QQQ.
Global X Robotics & Artificial Intelligence ETF (BOTZ)
If you just want to play the AI megatrend directly, this $2 billion ETF is the most popular way to round up top players in this emerging technology industry via one exchange-traded product. Just under 50 stocks make up this fund, led by semiconductor firm Nvidia but also robotic surgery leader Intuitive Surgical Inc. (ISRG) and manufacturing automation firm Keyence Corp. (KYCCF). If you believe the future is going to be made up of super-smart computers doing a lot of the tasks that people used to do inefficiently on their own, BOTZ is the way to go — and with year-to-date returns of more than 35%, it’s definitely having a moment in 2023.
[Bill Gates Portfolio: Best Stocks to Buy Now.]
Ark Innovation ETF (ARKK)
ARKK is broader than AI, but it is still focused on the tech sector. The actively managed Ark Innovation ETF fell from grace in 2022 as many of the holdings stumbled in a “risk off” environment. But while this innovation-focused fund is certainly risky and more prone to dramatic ups and downs than the typical index fund, lately the ups have been a lot more frequent than the downs. Top holdings at present include EV manufacturer Tesla Inc. (TSLA) and streaming leader Roku Inc. (ROKU), two stocks up more than 70% and 50%, respectively, on the year. If you want to play innovative technologies and ride recent momentum in these stocks, ARKK is one way to do that.
Global X MSCI Greece ETF (GREK)
One of the top-performing country-specific ETFs this year, with more than 25% gains year to date, GREK is a unique play on the local economy of its namesake eurozone nation. It’s modest but established, with about $200 million in assets, and its top holdings are all Greek firms. You may not have heard of some of its component stocks, including local bank Eurobank Ergasias Services and Holdings SA (EGFEY) or the Greek Organisation of Football Prognostics SA (GOFPY), a for-profit company dedicated to gambling on lotteries and sports in the region. But with the GDP of Greece growing almost 6% in 2022 and inflation in the region falling precipitously in 2023, the deck is stacked for a good run in GREK right now.
Pimco Enhanced Short Maturity Active ETF (MINT)
In a rising interest rate environment, bond funds are increasingly coming into favor. That’s not just because yields generally are moving higher, but also because short-dated bonds that are generally lower-risk actually offer better rates of return than longer-dated and riskier bonds at present. This inverted yield curve, where yields actually decline the farther out your bonds mature, is a strange and unique circumstance. But the bottom line is that short-term bonds can offer strong income potential at present without the risk of the same long-term volatility. MINT commands about $9 billion in assets, with a current yield of 5.2% — roughly three times that of the S&P 500.
iShares Gold Trust (IAU)
Closing out the list of the best ETFs to buy now is another defensive alternative to high-flying tech stocks and mega-cap leaders. IAU offers direct exposure to physical gold prices, but without the hassle of buying and selling bars of bullion or coins. While inflation isn’t quite as strong as it was during the peak of last year, the risk of rising prices and a challenging market environment have led many investors to hide out in the safe haven of gold lately. If you’re worried the other shoe will drop this summer, or if you’re just interested in returns that are not correlated to the stock market, IAU could be one of the best ETFs to consider this June.
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7 Best ETFs to Buy Now originally appeared on usnews.com
Update 06/05/23: This story was previously published at an earlier date and has been updated with new information.
