We saw mixed performance across Wall Street in 2015, but one segment of the financial world had no such trouble: exchange-traded funds (ETFs) are simply booming.
Not so for ETFs. Indeed, with the trading year nearly over, the industry (now worth over $2 trillion) set a record for the number of funds available to investors.
Over 225 new funds debuted during the year, a 38% growth rate from 2014’s 202 newly-minted ETFs.
Over the same period of time, assets under management grew by 5%, representing $214.6 billion in new money flowing into the coffers of incredibly happy fund managers.
With that kind of growth and those huge dollar signs out there, investors can expect continued growth and choices for 2016.
In the meantime, as the clock winds down on 2015, it’s a good chance to look at some of this year’s winners, focusing exclusively on performance as provided by Barchart.com.
And while we’re at it, we’ll speculate just a bit on 2016, too.
Here are 5 ETFs that soared in 2015, and could well carry over as big winners into the new year…
With the oil and gas sector in a bit of a tizzy due to slumping crude prices, oversupply, a strain on fracking companies, and its services sector scrambling to find new sources of income, the sector is perhaps the last one where investors would expect to see any gains.
Here’s the secret to DRIP’s success: It’s an ETF that shorts the market it follows. Indeed, it’s a leveraged ETF that seeks to meet a 300% inverse performance of the S&P Oil and Gas Exploration & Production Select Industry Index.
Playing the downside of the oil and gas industry on a leverage basis paid off handsomely for DRIP this year.
For those investors with the stomach for highly-leveraged ETF sector plays, DRIP is a good bet for 2016.
WisdomTree Japan Hedged Health (DXJH)
YTD Performance: +35.62%
With just 57 stocks in the portfolio, DXJH tracks the WisdomTree Japan Hedged Health Care Index.
Major holdings include Takeda Pharmaceutical Co., and Otsuka Holdings. Its entire portfolio of stocks are based in Asia.
Healthcare is just as important a sector in Japan as the U.S., and DXJH is well positioned for that growth.
PowerShares NASDAQ Internet (PNQI)
YTD Performance: 21.55%
With 94 securities in the portfolio, PNQI tracks the NASDAQ Internet Index.
Expect PNQI to see steady gains through next year, too.
With 74 securities in the portfolio, PSCH is concentrated on small-cap players in the booming healthcare sector, and tracks the S&P 500 SmallCap 600 Capped Health Care Index.
PSCH has holdings across the spectrum of healthcare, including equipment and supplies, providers and services, and pharmaceuticals.
With healthcare a huge issue (and business) in the coming presidential election cycle, PSCH is well positioned for growth.
With 64 stocks in the portfolio, IGV tracks the investment results of an index representing North American stocks in the software sector.
Interestingly though, none of those holdings represents more that 10% of the portfolio by itself, although collectively the group comes in at nearly 36% of the total.
For investors who believe in the continued growth outlook for the sector, IGV is not only a winner for 2015, but a potential star for 2016.
This post originally appeared in mainstreetinvestor.com.
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