The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is up 10.7% year-to-date. A nice, solid performance to be sure, but there are plenty of great exchange-traded funds (ETFs) out there delivering jaw-dropping performances this year.
There are over 2,000 exchange-traded products trading in the U.S. and about 5% have delivered YTD returns of 30% or more.
Even when stripping out the leveraged funds, there is no shortage of great ETFs that are notching stellar performances. In terms of styles and investment factors, momentum and growth ETFs have been the places to be this year. That is due in large part to momentum and growth ETFs being heavily allocated to the consumer discretionary and technology sectors, which in turn often means large allocations to the FANG stocks.
Investors looking for great ETFs with excellent growth potential do not need to confine themselves to broad market, growth ETFs. Opportunities are bountiful at the sector- and international-levels. In fact, some of this year’s best-performing ETFs are tactical, highly focused funds.
Here are some great ETFs that are delivering epic returns this year with the potential to continue their bullish ways in the second half.
Great ETFs to Buy: ROBO Global Robotics and Automation Index ETF (ROBO)
Expense Ratio: 0.95%, or $95 annually on a $10,000 investment
It is not a stretch to say that plenty of investors have heard about the robotics and automation boom and how that theme will affect global economies, particularly jobs.
Many articles on these topics revolve around how the robots are coming to steal many familiar, blue collar, labor-intensive jobs. That thesis could be proven true, but there is an investment opportunity as well with the ROBO Global Robotics and Automation Index ETF (NASDAQ:ROBO).
ROBO debuted nearly four years ago and in that time, critics assailed the fund as too narrowly focused and destined to for quick closure. Nearly four years later, ROBO is proving its worth as a great ETF, not only due to its more than $808 million in assets under management, but its 25.4% year-to-date return as well.
Home to 92 stocks, ROBO is not a specific growth ETF, but it is at the frontier of a growing industry.
“On the technology side, innovations in AI and computer vision are, for the first time, bringing some of the Moore’s law type acceleration of productivity,” said ROBO’s issuer. “While one must be careful to not overstate the immediate impact of these innovations, the productivity gains from improved computer vision systems for pick & place and loading type applications are already starting to be realized.”
ROBO offers nice diversity among large-, mid- and small-cap stocks and nearly 56% of its holdings reside outside North America.
Great ETFs to Buy: WisdomTree China ex-State-Owned Enterprises Fund (CXSE)
Expense Ratio: 0.32%
Emerging markets are a source of strength this year and any number of funds tracking developing economies can be dubbed a “great ETF.” That label applies to an array of China funds, including the WisdomTree China ex-State-Owned Enterprises Fund (NASDAQ:CXSE).
CXSE has the feel of a growth ETF because, as its name implies, it excludes the lumbering, behemoth state-owned companies that figure prominently in the rosters of so many China ETFs. Arguing with CXSE’s results cannot be achieved.
The ETF is up 47.6% YTD, more than double the returns offered by the iShares China Large-Cap ETF (NYSEARCA:FXI), the largest China ETF trading in the U.S.
CXSE achieves its growth ETF feel with a combined allocation of over 60% to technology and consumer discretionary stocks, including Alibaba Group Holding Ltd (NYSE:BABA) and Baidu Inc (ADR) (NASDAQ:BIDU).
Great ETFs to Buy: ARK Innovation ETF (ARKK)
Expense Ratio: 0.75%
The ARK Innovation ETF (NYSEARCA:ARKK) is an actively managed fund that has a legitimate growth ETF feel to it. Up more than 51% YTD, ARKK can be considered a great ETF based on that performance alone, but the fund’s flexibility is notable.
Part of the reason ARKK is surging this year is its largest holding, which isn’t even a stock, but rather the famed crypto currency Bitcoin. Bitcoin accounts for over 7% of ARKK’s weight. This growth ETF also features storied growth stocks, such as Tesla Inc (NASDAQ:TSLA), Amazon.com, Inc. (NASDAQ:AMZN) and Nvidia Corporation (NASDAQ:NVDA).
As an actively managed ETF, ARKK is not constrained at the sector level. At the end of the second quarter, the fund devoted almost 73% of its combined weight to technology and healthcare stocks, according to issuer data.
Todd Shriber does not own any of the aforementioned securities.