What started off as a great year for stocks now looks like less of a slam dunk after the month of September. The S&P 500 closed the month down almost 3%, and the tech-heavy Nasdaq performed even worse with a nearly 4% drop.
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To be clear, we are still up by double digits on the year as measured by the major indexes. And if you’re a tech-focused investor, chances are good that you’ve fared even better. However, there are plenty of folks reassessing their tactics in what previously seemed like a less challenging environment on Wall Street.
The following ETFs all have something to offer if you’re reviewing your investing strategy in October:
| ETF | Expense Ratio | Year-to-date Performance (as of Oct. 3) |
| ProShares Bitcoin Strategy ETF (ticker: BITO) | 0.95% | 43.8% |
| Sprott Uranium Miners ETF (URNM) | 0.83% | 38.5% |
| WisdomTree Japan Hedged Equity Fund (DXJ) | 0.48% | 35.5% |
| iShares U.S. Technology ETF (IYW) | 0.40% | 40.3% |
| Global X Artificial Intelligence & Technology ETF (AIQ) | 0.68% | 32.3% |
| Vanguard S&P 500 ETF (VOO) | 0.03% | 11.6% |
| Vanguard Short-Term Corporate Bond ETF (VCSH) | 0.04% | 1.5% |
ProShares Bitcoin Strategy ETF (BITO)
Yes, the price of Bitcoin is still down significantly from its 2021 highs, but this year it is up more than 60%– and that has been great for related stocks in the space. BITO invests in Bitcoin futures, not the cryptocurrency directly, but that means it is investing in regulated financial products “by the book” instead of some of the more “Wild West” approaches to crypto. It’s also well established with a hefty $950 million in assets under management. While a strategy using futures does not provide a 1-to-1 link to Bitcoin, BITO is up more than 40% so far this year after factoring in distributions, and continues to look like a good alternative to stocks for those leery of the potential volatility on Wall Street right now.
Sprott Uranium Miners ETF (URNM)
Up nearly 40% on the year after a big run over the last two months, URNM is a $1.1 billion fund that is the largest and most liquid way to play the publicly traded stocks at the center of nuclear energy. It’s an international fund, with about half of the assets outside the U.S., with leading positions at present being Canadian uranium miner Cameco Corp. (CCJ) and Kazakhstan-based National Atomic Co. Kazatomprom (OTC: NATKY). The fund’s strategy is designed to track the performance of companies that devote at least 50% of their assets to the uranium mining industry. It also owns a small stake in physical uranium, with about 12% of assets in the commodity at present. The hopes of this industry supporting a transition away from fossil fuels in the decades ahead has lifted URNM nicely lately.
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WisdomTree Japan Hedged Equity Fund (DXJ)
Since January, the Nikkei 225 index has risen by more than 30% — and as a result, DXJ has been looking great. The fact that it’s also hedged against currency fluctuations between the dollar and yen has helped, too, with total year-to-date returns for this ETF outperforming the Nikkei itself with more than 35% gains. With U.S. and European stocks facing so much uncertainty, foreign investors continue to dive into Japanese equities as an alternative. With more than 400 components, including automotive leader Toyota Motor Corp. (TM) and Asian banking powerhouse Mitsubishi UFJ Financial Group Inc. (MUFG), this is a simple one-stop way for investors to gain exposure to that trend.
iShares U.S. Technology ETF (IYW)
While there definitely has been some trepidation on Wall Street lately, with the S&P 500 dipping in September, the tech sector continues to put up above-average performance. In the case of IYW — one of the most dominant funds in the sector with more than $10 billion in assets under management — this ETF is up more than 40% this year despite challenges for other sectors and a bit of lost momentum in the market at large lately. Its 130 or so components are led by the usual suspects of Silicon Valley — leaders like Apple Inc. (AAPL) and Microsoft Corp. (MSFT) — so if you want to continue to bet on this sector, IYW is one of the go-to ways to do so.
Global X Artificial Intelligence & Technology ETF (AIQ)
Getting more specific about tech, one of the largest dedicated AI funds out there is this Global X offering that is focused on the future of machine learning and artificial intelligence applications. Its portfolio of roughly 90 companies include diversified big tech names like Google parent Alphabet Inc. (GOOGL) and chipmaker Intel Corp. (INTC) that have exposure to the megatrend but are not undercapitalized firms that are all-or-nothing bets. If you want to play high-octane startups, this fund isn’t for you. But if you simply want a way to move your portfolio in the direction of AI without aggressive risks, AIQ is an interesting way to do that.
Vanguard S&P 500 ETF (VOO)
To be honest, short-term volatility often can present long-term opportunities for patient investors who tune out the noise. So while it may be tempting to bias your portfolio towards Bitcoin or AI, or to avoid the trouble spots you see lately, it may be more effective to simply stay the course and rely on the long-term profit potential of Wall Street. By all accounts, the Federal Reserve’s moves to tame inflation are proving effective, and if consumer sentiment continues to prove resilient — don’t forget how negative folks were at this time last year — there could be a buying opportunity broadly for stock investors. Rather than get too clever in October, perhaps consider sticking with a core holding like VOO that simply allows you to ride this trend. Remember, stocks are still up more than 10% in 2023 despite all the hand-wringing, so you may not want to give up on blue chips just yet.
Vanguard Short-Term Corporate Bond ETF (VCSH)
Looking beyond stocks, it’s worth noting that this short-term corporate bond fund is now approaching a 6% payout as interest rates have steadily risen over the last year or so. Longer-dated funds take more time for older bonds to roll off and be replaced with newer, higher-yield assets — but the short-term nature of VCSH means it has steadily rotated into these income-producing assets. With a yield of 5.6% at present and the promise of potentially higher yields in the months ahead, low-risk investors looking for a place to hide amid recent volatility could do worse than this $36 billion Vanguard fund.
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7 Best ETFs to Buy Now originally appeared on usnews.com
Update 10/04/23: This story was previously published at an earlier date and has been updated with new information.
