With one quarter under our belts, the pack in the Best ETFs for 2018 contest has started to space out, but we’re still early in the year. The leaders cannot rest on their laurels and there’s still plenty of time for the lagging exchange-traded funds to catch up.
But all of that is neither here nor there — today we are just looking at the first quarter, and it has been a fascinating one. While the leader in the contest has been leading the way virtually the entire quarter, other positions have been shuffling back and forth on an almost daily basis. It truly is anyone’s game.
So, without further ado, here are the picks, in order from last to first as of March 30. Who are you pulling for?
Best ETFs for 2018: Market Vectors Rare Earth ETF (REMX)
YTD Change through March 29: -7.5
Expense Ratio: 0.61%
Investor: John Jagerson and Wade Hansen
The Market Vectors Rare Earth ETF (NYSEARCA:REMX) just haven’t had a good year so far. Lithium stocks are taking it on the chin after a couple years of outperformance.
Unexpected pricing pressure looks to be the culprit for a lot of it, along with worries that supply could start to increase. Since a tight supply has been part of the reason these stocks have done so well, threats to that naturally have investors on edge.
Still, it’s early yet, and the demand for lithium, in particular, is only going to grow.
Additionally, the continued lethargy of oil prices is keeping a lid on demand for electric cars to a certain extent, keeping REMX more boxed up in the short term.
Best ETFs for 2018: Energy Select Sector SPDR (ETF) (XLE)
YTD Change: -6.7%
Expense Ratio: 0.13%
Investor: Kent Thune
The Energy Select Sector SPDR (ETF) (NYSEARCA:XLE) has had a rough intro to 2018. One of the problems with being a sector-specific ETF is that if that sector is facing headwinds, so is the ETF.
And right now, energy is dealing with continuing uncertainty around oil prices.
The good news is that should oil suddenly surge, all the big-name companies in the XLE ETF are going to surge right along with it, so catching up is well within the realm of possibility.
Best ETFs for 2018: Vanguard FTSE All-World ex-US Small-Cap ETF (VSS)
YTD Change: 0%
Expense Ratio: 0.13%
Investor: Jeff Reeves
Global growth trends may be the way to go in 2018, and the Vanguard FTSE All-World ex-US Small-Cap ETF (NYSEARCA:VSS) is a great way to play that space.
True, the first quarter has been rough on VSS, but there are opportunities for growth internationally that U.S. markets don’t have as clearly. As Reeves puts it:
“To be clear, I don’t expect America to crumble and I still expect the S&P 500 index to finish handily in the green this year. But after a very hot 2017 and some admitted difficulties to start 2018, it’s only natural for most investors to start looking for greener pastures.”
All in all, the best ETF for this year could very well draw its strength from outside of the U.S.
Best ETFs for 2018: PowerShares Water Resource Portfolio (PHO)
YTD Change: 0.7%
Expense Ratio: 0.62%
Investor: James Brumley
The PowerShares Water Resource Portfolio (NASDAQ:PHO) ETF isn’t your flashy, exciting ETF, but that’s not too surprising. It’s based on one of the most basic needs in life — clean, drinkable water. Purifying it, reclaiming it and delivering it. It’s not exciting, and investors treat it as such.
As Brumley put it, “This is a trade, however, that — to put it in baseball parlance — pays off not with the occasional grand slam, but a steady string of singles and the occasional double.”
In other words, while this ETF isn’t burning bright, its focused more on slow-and-steady growth could keep it in the running all year.
Best ETFs for 2018: ETFMG Video Game Tech ETF (GAMR)
YTD Change: 1.4%
Expense Ratio: 0.82%
Investor: Robert Waldo
You might be tempted to dismiss video games as the providence of little kids and slack-jawed teens, but video games have become big business — and the ETFMG Video Game Tech ETF (NYSEARCA:GAMR) can help you capitalize on that.
You see, it’s not just about selling the games, or the consoles, or the merchandise, or the accessories. No, you’ll find one of the biggest growth areas for video games is eSports, which are expected to see some big gains in the coming years. As Waldo said, “eSports is becoming mainstream much faster than you think, as revenue grew 66% in 2017 alone, already exceeding previous growth estimates for 2020.”
And that growth is expected to continue, fueling GAMR to gains this year and maybe the title of Best ETF in this contest.
Best ETFs for 2018: PowerShares QQQ Trust (QQQ)
YTD Change: 2.8%
Expense Ratio: 0.2%
Investor: Readers’ Choice
Tech had a good 2017 and despite general market weakness is trying to flex its muscles again in 2018. And if you want to get into that strength without being subject to the weakness that individual companies may face — see Facebook, Inc.’s (NASDAQ:FB) recent stumble — then your best bet is to grab wide with the PowerShares QQQ Trust (NASDAQ:QQQ).
And one of the things that really recommends this particular ETF is its expense ratio. “The QQQ ETF has an expense ratio of just 0.2%, or $20 annually per $10,000 invested. Buying into the QQQ gives an investor access to a lot of quality at a reasonable price.”
It is still in a position to vie for the title of Best ETF for 2018.
Best ETFs for 2018: SPDR S&P Biotech (ETF) (XBI)
YTD Change: 3.4%
Expense Ratio: 0.35%
Investor: Johnson Research Group
The SPDR S&P Biotech (ETF) (NYSEARCA:XBI) has been in the running basically since the start. This equal-weighted fund covers more than 100 of the best biotechs available on the markets.
The market stress that shook the markets in March brought down a number of stocks, and the members of the XBI ETF were not really an exception. However, it has held up better than many areas of the markets, certainly outstripping the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) over the first quarter.
Can it keep the strength up and take the top spot in the Best ETFs contest?
Best ETFs for 2018: iShares Emerging Markets Dividend ETF (DVYE)
YTD Change: 3.7%
Expense Ratio: 0.49%
Investor: Charles Sizemore
Like VSS, the iShares Emerging Markets Dividend ETF (NYSEARCA:DVYE) is focused on emerging markets — though in this case, instead of small-cap names, it puts the spotlight on dividend stocks.
That different focus has helped DVYE do a little better than VSS so far, and it could be looking forward to more growth — or at the very least, hold up better than U.S. names. As Sizemore wrote, “As I write this, the market is in sell-off mode, in part due to fears that U.S. sanctions on China could snowball into a bona fide trade war.”
If that gets worse, investors should look even more toward emerging markets to help their portfolios.
Best ETFs for 2018: ALPS Medical Breakthroughs ETF (SBIO)
YTD Change: 4.4%
Expense Ratio: 0.5%
Investor: Todd Shriber
Do you know what’s been helping ALPS Medical Breakthrough ETF (NYSEARCA:SBIO) duke it out for the second spot for more of 2018? It’s not just having some great biotech names — though that helps.
No, one of the great things about SBIO is how many of these companies could look attractive to larger companies with M&A in mind. As Shriber says, “No, not all of the fund’s constituents will be acquired. Still, this biotech ETF is home to multiple legitimate takeover targets. Jefferies recently highlighted a slew of smaller biotech companies that are credible acquisition targets, several of which reside in SBIO.”
And that means there’s a chance for some serious pops in this ETF.
Best ETFs for 2018: Market Vectors Semiconductor ETF (SMH)
YTD Change: 6.6%
Expense Ratio: 0.35%
Investor: Dana Blankenhorn
So far, VanEck Vectors Semiconductor ETF (NYSEARCA:SMH) has been leading the way in the Best ETFs for 2018 contest, though there are some headwinds on the horizon that could impact it.
As Blankenhorn wrote, “The question for this quarter is whether the (Donald) Trump Administration is serious about a trade war with China, and how that might impact the semiconductor industry as a whole.”
However, one thing to keep in mind — even if the trade war hurts specific semiconductor stocks, SMH’s status as an ETF would allow it to shift from stocks that are falling to ones that are rising. And the demand for semiconductors isn’t going to go away.
Jessica Loder is an assistant editor at InvestorPlace.com. As of this writing, she did not hold a position in any of the aforementioned securities.