There’s an old saying that past performance is no guarantee of future returns. But when it comes to investing in 2024, there’s something to be said for letting your winners run and continue to build on recent momentum if you want to harness outperformance.
While there are indeed risks, including geopolitical uncertainty thanks to the ongoing military actions in Gaza and Ukraine and uncertainty about inflation and interest rates here at home, a few corners of the market have been consistently putting up strong gains so far this year.
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The following nine picks represent the head of the pack. Our list excludes leveraged ETFs, and sticks to funds that have a minimum of $100 million in assets under management, so it’s not a comprehensive list of everything that’s out there. But if you want to skip over the most complicated or least established funds out there, this list of the best-performing ETFs of 2024 will give you a good steer on the themes that are working on Wall street right now — and the ETFs that let you buy into these trends.
iShares MSCI Turkey ETF (ticker: TUR)
— Expense ratio: 0.59%, or $59 annually on $10,000 invested
— Assets under management: $206 million
— Year-to-date return: 16%
After inflation picked up to an ugly 65% rate last year, Turkey’s central bank has steadily hiked its benchmark interest rate to a high of 45% to beat back this trend. It looks like Wall Street thinks this strict and dramatic response is starting to pay off, however, with this leading Turkey ETF up about 30% from its lows last summer and riding a brisk gain out of the gate this year. Obviously, the environment is volatile, but the 90 or so holdings that make up this fund have been doing nicely — and with few other options to invest in the region, TUR has seen decent investor interest in 2024.
WisdomTree Japan Hedged Equity Fund (DXJ)
— Expense ratio: 0.48%
— Assets under management: $4.4 billion
— Year-to-date return: 17%
Since Jan. 1, the Nikkei 225 index has risen by more than 17% — 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 provided a tailwind, too, with total year-to-date returns for this ETF matching the Nikkei itself thanks to its unique strategy. Foreign investors continue to dive into Japanese equities, and after 34 years the Nikkei finally surpassed the December 1989 record that had previously stood as the high watermark. With more than 440 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 the bull market in this region — without worries about currency headwinds.
Simplify Interest Rate Hedge ETF (PFIX)
— Expense ratio: 0.50%
— Assets under management: $139 million
— Year-to-date return: 19%
This tactical ETF from boutique asset manager Simplify seeks to hedge interest rate movements stemming from rising long-term interest rate shifts. The fund has had its moments over the past year or so of changes at the Fed, and is returning to focus as investors now try to decide whether the central bank will embark on a significant period of rate cuts. In such an environment, the interest rate options held in PFIX are a way to smooth out some of that uncertainty in your portfolio and profit from the changes.
VanEck Semiconductor ETF (SMH)
— Expense ratio: 0.35%
— Assets under management: $15.8 billion
— Year-to-date return: 19%
Tech stocks have been generally on the uptrend, but one particular corner of technology that has been red-hot in 2024 is the semiconductor sector. SMH is the largest and most liquid way to invest in chipmakers, with a focused list of 25 components led by giants Nvidia Corp. (NVDA) and Taiwan Semiconductor Manufacturing Co. Ltd. (TSM). The industry is notoriously cyclical, to be fair, and the downside potential of that was front and center in 2022 as SMH and its components fell sharply amid weak pricing, oversupply and other concerns. But with a strong outlook for the sector in 2024, chipmakers are trading near all-time highs, and this ETF has been doing quite well since Jan. 1.
Amplify U.S. Alternative Harvest ETF (MJUS)
— Expense ratio: 0.75%
— Assets under management: $115 million
— Year-to-date return: 22%
Cannabis is now legal in 37 states for medical use and fully legal in 23 states. And with increased talk of changes to regulations at the federal level, it’s unsurprising that the sector has been of big interest to the investor community. MJUS is one of the few ways to play the growing corner of the stock market that is focused on recreational and medical marijuana sales. The fund is composed of just over 20 total holdings and is actively managed, with a focus on a market that is expected to grow to $67 billion by 2028.
There is definitely risk in this evolving sector. The vast majority of cannabis stocks are down sharply from highs in 2021, when investor interest seemed to peak and the hype of legalization was overshadowed by struggles to achieve profitability among many startups. Still, if you’re bullish on the long-term prospects of this industry, then MJUS is an ETF to watch.
[READ: 7 Top-Rated ETFs to Buy Now]
AdvisorShares Pure U.S. Cannabis ETF (MSOS)
— Expense ratio: 0.83%
— Assets under management: $934 million
— Year-to-date return: 25%
Populated with 60 leading cannabis stocks, MSOS is another one of the most popular ways to play the marijuana legalization megatrend that is lifting companies in this specialized industry. Top holdings at present include Curaleaf Holdings Inc. (OTC: CURLF), TerrAscend Corp. (OTC: TSNDF) and Cresco Labs Inc. (CRLBF), among others. As with the previously mentioned Alternative Harvest ETF, the sector can be quite volatile from month to month or year to year, but in 2024 it’s undeniable that some of these stocks are moving big to the upside.
YieldMax NVDA Option Income Strategy ETF (NVDY)
— Expense ratio: 0.99%
— Assets under management: $227 million
— Year-to-date return: 38%
The top tier of 2024 ETFs includes this highly sophisticated investment product, which is tied to options in Nvidia stock. For those unfamiliar with a “covered call” strategy like the one used by this fund, it involves selling options contracts on a stock based on a future strike price. That approach caps the upside in your stock, as you’ve sold the “option” for someone else to buy it at a fixed cost. But in exchange, you get an up-front payment that can provide steady and sometimes substantive cash flow. It takes work, and is sometimes complicated, so YieldMax decided to take the guesswork out of the strategy and just do the options trading for investors looking to target NVDA. The year-to-date performance of this ETF doesn’t quite match the stock, of course, as NVDA shares have soared 57% so far in 2024.
ProShares Bitcoin Strategy ETF (BITO)
— Expense ratio: 0.95%
— Assets under management: $2.5 billion
— Year-to-date return: 41%
This ProShares fund invests in Bitcoin (BTC) futures — derivatives contracts tied to the popular cryptocurrency. This means it is not fully invested directly in bitcoin thanks to the nature of these financial contracts, but nevertheless has given strong exposure to the upside in BTC this year. It’s worth noting that the fund has seen sharp outflows in overall assets even as it has risen in price, as it was only this January that the SEC approved 11 spot Bitcoin ETFs that are tied to the digital currency itself rather than related futures or options. Still, the performance of this fund as well as its uniquely different exposure to crypto markets should mean it remains a relevant option even as the new Bitcoin-backed ETFs come into their own.
Grayscale Bitcoin Trust (GBTC)
— Expense ratio: 1.5%
— Assets under management: $26.6 billion
— Year-to-date return: 56%
Just as the previously mentioned BITO saw outflows amid the spot Bitcoin ETFs approved by the SEC this year, Grayscale saw the other side of that as it won regulatory approval for its Bitcoin-backed fund and moved into the limelight. Grayscale has been a frontrunner from that batch, however, growing quickly to command a staggering amount of assets in short order. And while it doesn’t track Bitcoin prices exactly on a 1-to-1 basis over time as a digital wallet would, that mild divergence has actually been in Grayscale’s favor. Bitcoin itself is only up about 48% this year as of Feb. 28, while this leading ETF is up by even more.
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9 Best-Performing ETFs of 2024 originally appeared on usnews.com
Update 02/29/24: This story was previously published at an earlier date and has been updated with new information.
