With September officially behind us, the stock market enters its critical fourth quarter of the year. And as voters head to the polls, the stakes are even higher in 2024.
According to CFRA Research, nine of the 11 GICS sectors have typically risen in the fourth quarter of election years dating back to 1992. What’s more, while January can sometimes be quite volatile as investors look ahead, the “Santa Claus rally” across the holiday season often provides year-end window-dressing as stocks tend to finish Q4 on a strong note.
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If you’re looking to make the most of this important time for the market, the following seven exchange-traded funds, or ETFs, all offer different ways to tap into the potential momentum on Wall Street as we close out 2024. They include:
| ETF | Assets Under Management | Expense Ratio |
| Invesco S&P 500 Momentum ETF (ticker: SPMO) | $2.3 billion | 0.13% |
| SPDR Gold Shares (GLD) | $70 billion | 0.40% |
| iShares Bitcoin Trust ETF (IBIT) | $24 billion | 0.12% |
| United States Copper Index (CPER) | $164 million | 1.04% |
| U.S. Global Jets ETF (JETS) | $1 billion | 0.60% |
| The Utilities Select Sector SPDR Fund (XLU) | $17 billion | 0.09% |
| iPath Series B S&P 500 VIX Short-Term Futures (VXX) | $232 million | 0.89% |
Invesco S&P 500 Momentum ETF (SPMO)
Assets under management: $2.3 billion Expense ratio: 0.13% annually, or $13 on $10,000 invested
Broadly speaking, 2024 has been a great year for all stocks. As such, the age-old strategy of letting winners run rather than pulling back on the reins has paid off handsomely. SPMO subscribes to this momentum-friendly approach by zeroing in on the top 100 performers in this popular index of large U.S. companies and excluding the rest. Right now, that places Nvidia Corp. (NVDA) and Meta Platforms Inc. (META) among its top holdings — and considering that since Jan. 1 those stocks are up 140% and 65%, respectively, it’s easy to see how this approach can result in outperformance. As a group, SPMO’s holdings have helped this fund deliver a roughly 38% year-to-date return to double the performance of the broader S&P 500.
SPDR Gold Shares (GLD)
Assets under management: $70 billion Expense ratio: 0.40% annually, or $40 on $10,000 invested
This gold-backed ETF is the most liquid and popular way to invest in the precious metal. And with gold prices soaring, GLD has tacked on an impressive 27% gain year to date in 2024 to top even the brisk performance of the S&P 500 index of large-cap stocks. There are a host of reasons for this, from geopolitical uncertainty to changing central bank policies that could weaken the dollar or potentially spark inflation in the months ahead. Together, it has made a compelling case for investment in this leading gold ETF — and with GLD pushing up against a new 52-week high, the case seems equally compelling going forward, too.
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iShares Bitcoin Trust ETF (IBIT)
Assets under management: $24 billion Expense ratio: 0.12% annually, or $12 on $10,000 invested
While more volatile than gold, Bitcoin has also been a consistent outperformer of the stock market in 2024. IBIT allows investors to access Bitcoin in a nearly direct way without maintaining their own digital wallet. This allows investors a vehicle that sidesteps some of the digital frictions of cryptocurrency ownership, as well as some of the tax burdens. Those who are crypto believers or interested in assets other than Bitcoin may prefer to go the digital wallet route, but investors looking for a simple way to gain exposure in their brokerage account may want to tap into this fund that has roughly doubled the gains of the S&P 500 since Jan. 1.
United States Copper Index (CPER)
Assets under management: $164 million Expense ratio: 1.04% annually, or $104 on $10,000 invested
Copper hit its highest-ever price on May 20, and while the base metal has cooled off a bit, it is still seeing strong performance as we look to close out 2024. As a result, CPER has also been doing well thanks to its structure as a cost-effective way to play copper futures via an exchange-traded fund. Right now, the ETF is composed of copper futures that mature in December, March and May, but it “rolls” those futures on a monthly basis to ensure it’s always looking ahead to the movement of this metal. To be clear, futures are derivatives of copper and do not follow prices on a 1-to-1 basis. And because of its complex holdings, expenses are significantly higher than standard index funds. However, a nice 7% run across September alone shows strong investor support for CPER and its underlying futures contracts.
U.S. Global Jets ETF (JETS)
Assets under management: $1 billion Expense ratio: 0.60% annually, or $60 on $10,000 invested
The airline industry suffered a deep sell-off this summer thanks to a series of disappointing earnings reports driven by a glut of ticket supply that drove down fares across the board. Now, the travel biz seems to be recovering quite well — and the JETS ETF is up about 35% from its August lows thanks to strong performance lately from components including Delta Air Lines Inc. (DAL), United Airlines Holdings Inc. (UAL) and American Airlines Group Inc. (AAL), among others. A notoriously cyclical business, there’s no guarantee these high-flying airlines will keep up their run in the months ahead, but strong momentum as we close out the year makes JETS worth a look.
The Utilities Select Sector SPDR Fund (XLU)
Assets under management: $17 billion Expense ratio: 0.09% annually, or $9 on $10,000 invested
While you may not think of utilities as particularly sexy investments, stocks in this sector have been outperforming all year thanks to the fact that other high-tech megatrends such as artificial intelligence and EVs are naturally creating demand for power. Consider Constellation Energy Corp. (CEG), which just saw shares spike on news it will partner with tech titan Microsoft Corp. (MSFT) to ensure the firm has the energy it needs to power its data centers and other operations. XLU is up almost 30% so far this year due to what appears to be a long-term evolution in energy demand, and offers a rare bit of growth in what is normally a sleepy corner of Wall Street.
iPath Series B S&P 500 VIX Short-Term Futures (VXX)
Assets under management: $232 million Expense ratio: 0.89% annually, or $89 on $10,000 invested
As we enter the final stretch of 2024, it’s worth pointing out that past performance is no guarantee of future returns. As conflicts involving Israel and Russia continue and as early voting begins in a closely-fought election at home, there’s no telling what could happen in the weeks ahead. Thankfully, investors who don’t want to pick a specific corner of the market in these uncertain times can bet on volatility itself as measured by the CBOE Volatility Index, commonly known as the VIX. VXX is a way to profit from potential short-term increases in volatility via futures markets. But keep in mind that because of how it’s structured, VXX can be a costly long-term holding, and this kind of play on volatility should be seen as either a swing trade or an insurance policy against market mayhem.
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7 Best ETFs to Buy Now originally appeared on usnews.com
Update 10/01/24: This story was previously published at an earlier date and has been updated with new information.
