With each passing month of 2023, Wall Street continues to put up strong returns despite persistent negativity in the financial media. Sure, inflation and interest rates remain a challenge. And sure, the war in Ukraine and severe droughts fueling catastrophic wildfires are two depressing stories that don’t seem to be getting any better with the passage of time.
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But if you’re simply looking at your brokerage account and not the headlines? Well, things could be much worse.
The following exchange-traded funds, or ETFs, are good examples of the kind of investments that are doing well right now. And most of them are “risk on” ETFs that may be a bit on the aggressive side — but have performance that shows the risks have been worth the rewards lately. Nobody knows what the future holds, of course, but based on recent momentum all are among the best ETFs to watch in July.
| ETF | Year-to-date return (as of July 3 close) |
| Grayscale Bitcoin Trust (ticker: GBTC) | 146.7% |
| US Global Jets ETF (JETS) | 26.8% |
| iShares US Home Construction ETF (ITB) | 40.7% |
| VanEck Oil Services ETF (OIH) | -0.4% |
| SPDR S&P Metals and Mining ETF (XME) | 0.4% |
| Vanguard Mega Cap Growth ETF (MGK) | 37% |
| Invesco S&P 500 Equal Weight ETF (RSP) | 7.2% |
Grayscale Bitcoin Trust (GBTC)
With returns of more than 140% year to date and a more than 40% jump in the last month alone, it’s hard to find an exchange-traded fund with better momentum right now. But while the fund is red hot and well-established with more than $19 billion in total assets at present, it’s not particularly elegant — or diversified. A full 100% of the portfolio is allocated to Bitcoin (BTC), meaning this fund is little more than a way to play crypto in a more traditional investment vehicle. Keep this risk profile in mind if you’re interested in this ETF.
US Global Jets ETF (JETS)
The $2 billion JETS ETF is different in many ways from the prior Bitcoin fund. It has 50 components instead of just one asset backing its performance, and they’re all stocks. But it’s the same insofar as it’s a pretty one-dimensional play on — you guessed it — airlines. Top holdings include Delta Air Lines Inc. (DAL), American Airlines Group Inc. (AAL), and Southwest Airlines Co. (LUV), among others. The optimism that has persisted on Wall Street in the face of doom and gloom seems to be finally moving into the consumer sector as well, and a series of strong headlines such as recently raised guidance from Delta seems to prove the airline biz is booming. JETS is up more than 15% in the last month and about 27% year to date.
iShares US Home Construction ETF (ITB)
Another “risk on” sector that has been doing very well lately is real estate — specifically, residential construction. And this $2 billion iShares fund is the go-to way to play that trend, holding the biggest stocks in the sector including D.R. Horton Inc. (DHI), NVR Inc. (NVR) and Lennar Corp. (LEN). ITB is up about 40% year to date with a slow-and-steady appreciation that has consistently proven the naysayers wrong over the first half of the year. And with the latest Mortgage Banker’s Association report released in June showing continued growth in demand for home loans, that momentum shows little sign of slowing down.
[READ: 7 of the Best Long-Term Stocks to Buy.]
VanEck Oil Services ETF (OIH)
After a big 2022, the energy sector has been under pressure lately as oil prices have rolled back. However, a strange bright spot in the oil patch has been this specialized VanEck fund, which holds about 25 oilfield service companies including Schlumberger Ltd. (SLB) and Halliburton Co. (HAL), among others. OIH has risen about 15% in the last month or so thanks to increased optimism about the global economy and related energy demand.
Admittedly, crude prices remain off about 50% from their 52-week high. But in its most recent earnings report, Halliburton reported strong financials that indicated global increases in drilling activity. At the end of the day, the demand from integrated oil companies that need these service stocks is more important than anything else — and with Big Oil ramping up, now could be an interesting time to consider OIH.
SPDR S&P Metals and Mining ETF (XME)
Riffing again on the theme of a better-than-expected economy, XME is a stand-in for industrial demand as it is composed of about 30 companies that produce raw materials including steel, aluminum and copper. As things continue to hum along despite hand-wringing about a recession, businesses aren’t just continuing to operate but in many cases increasing their output and pursuing growth. This nearly $2 billion ETF has underperformed the S&P 500 since Jan. 1, but recent optimism has pushed the fund up by almost 15% in the last 30 days. That hints that this raw materials fund could be worth watching in the months ahead.
Vanguard Mega Cap Growth ETF (MGK)
Of course, all these discrete sectors represent different ways to invest in what seems to be a resilient economic environment. But the reality lately has been that a small group of big stocks have been doing most of the work on Wall Street this year. For instance, Nvidia Corp. (NVDA), Meta Platforms Inc. (META) and Tesla Inc. (TSLA) have all more than doubled year to date, and trillion-dollar tech leaders Apple Inc. (AAPL) and Microsoft Corp. (MSFT) are both up about 40%. With returns like that, why worry about slicing up the stock market by sector when you can just go for the big guys via this Vanguard “mega cap” fund that holds the 100 largest growth-oriented stocks in the U.S.? MGK is up 33% this year, more than twice the broader S&P 500 index, proving that bigger sometimes really is better.
Invesco S&P 500 Equal Weight ETF (RSP)
The best long-term investment plan often involves looking beyond short-term and tactical trends, however, and taking a view that can be measured in years rather than months. This Invesco fund comprises the 500 stocks in the S&P 500, but with an “equal weight” approach that does not play favorites. That means Silicon Valley giants have roughly the same influence as regional banks or more modest-sized industrial companies. This may not allow you to harness outsized returns in the short term, but in the long run this diversification could be a big boon if the rosy environment on Wall Street takes a turn for the worse.
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7 Best ETFs to Buy Now originally appeared on usnews.com
Update 07/05/23: This story was published at an earlier date and has been updated with new information.
