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3 Great ETFs to Buy Now for Q4 Momentum


  • ETFs give investors instant portfolio diversification and these three funds look promising.
  • VanEck Semiconductor ETF (SMH): The fund has comfortably outperformed market indices due to its exposure to semiconductor stocks.
  • Invesco QQQ Trust Series 1 (QQQ): This fund focuses on big tech and is one of the most liquid fiunds in the financial market.
  • ARK Innovation ETF (ARKK): A high-risk, high-reward fund that focuses on companies achieving high year-over-year revenue growth.

ETFs allow investors to diversify their capital across many stocks without much effort. Instead of carefully constructing a portfolio and staying on top of many positions, fund managers do all the work with most top ETFs to buy.

While you will have to pay ETF fees, some expense ratios are very low. It’s possible to find ETFs with annual expense ratios below 0.50% due to how they get managed.

However, a low expense ratio isn’t enough. Investors also want returns that mirror or beat the market’s performance. Investors looking for some Q4 momentum may wish to consider these ETFs.

VanEck Semiconductor ETF (SMH)

VanEck Morningstar SMID Picks

The VanEck Semiconductor ETF (NASDAQ:SMH) is a top-performing fund that tracks semiconductor stocks. The fund has gained 56% year-to-date due to the rising importance of artificial intelligence. SMH is up an impressive 233% over the past five years, comfortably surpassing the market indices.

Even more impressive is that the VanEck Semiconductor ETF has generated an annualized return of 22.61% over the past 10 years. The fund has a 0.25% expense ratio and over $10 billion in total assets under management. SMH has been around since Dec. 20, 2011. Shares offer a 30-day SEC yield of 0.76%. 

The fund’s top three holdings are Nvidia (NASDAQ:NVDA), Taiwan Semiconductor Manufacturing (NYSE:TSM) and Broadcom (NASDAQ:AVGO). Each position comprises roughly 20%, 13%, and 7% of the fund’s positions.

Semiconductors are important components for many devices, gadgets and resources. Artificial intelligence (AI) will only increase the demand for these resources, but these were all bullish investment opportunities before AI came into the picture.

Invesco QQQ Trust Series 1 (QQQ)

Invesco logo in blue with mountain image
Source: Shutterstock

The Invesco QQQ Trust Series 1 (NASDAQ:QQQ) fund mirrors the Nasdaq 100. When tech stocks soar, QQQ goes up, too. The fund has gained 43% year-to-date and is up 125% over the past five years.

QQQ is one of the most popular funds in the financial market. That means plenty of liquidity and very few issues with bid-ask spreads. Invesco also has 3x leveraged ETFs that follow QQQ. These funds include ProShares UltraPro Short (SQQQ) and ProShares UltraPro QQQ (TQQQ). The leveraged funds are riskier.

QQQ has been around since 1999 and focuses on big tech. The fund has a 0.20% expense ratio and invests in 100 companies. QQQ has $210 billion in assets under management.

The fund’s top three holdings are Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Amazon (NASDAQ:AMZN). Apple and Microsoft comprise over 10% of the fund’s total assets. Amazon stock is third, with 5.68% of the fund’s total assets.

ARK Innovation ETF (ARKK)

The website for the Ark Invest Disruption Innovation ETF ARKK.
Source: Spyro the Dragon / Shutterstock.com

The ARK Innovation ETF (NYSEARCA:ARKK) focuses on innovative companies, but what does that mean for investors? While the fund looked unstoppable from 2017 to 2021, shares shed over 80% of their value from peak to trough.

With this context, investors became more skeptical of the fund. The ARK Innovation ETF primarily invests in companies that exhibit high revenue growth. It’s normal for the fund to make riskier investments that feature companies burning through cash.

The idea behind these growth investments is that companies will eventually turn profits and reward long-term investors. It took Amazon almost a decade to generate a profit. The company continued to reinvest any profits, which resulted in net losses for many years. 

Some investors remain patient during those stretches. The ARK Innovation ETF attracts those types of investors. 

The fund has a 0.75% expense ratio and has been around since 2014. ARKK’s top three holdings are Coinbase (NASDAQ:COIN), Roku (NASDAQ:ROKU) and Tesla (NASDAQ:TSLA). These three stocks comprise 27% of the fund’s total assets.

On the date of publication, Marc Guberti did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Marc Guberti is a finance freelance writer at InvestorPlace.com who hosts the Breakthrough Success Podcast. He has contributed to several publications, including the U.S. News & World Report, Benzinga, and Joy Wallet.

Article printed from InvestorPlace Media, https://investorplace.com/2023/11/3-great-etfs-to-buy-now-for-q4-momentum/.

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