Top-Ranked ETFs That Crushed the Market in 1H

The first half of 2020 was marked by huge volatility mainly triggered by the COVID-19 outbreak, which had pushed the U.S. stock market into bear territory in late March. However, the stocks staged an impressive comeback from the lows. A booming technology sector, an unprecedented stimulus from the central bank and the government, and hopes of a potential coronavirus vaccine were the biggest catalysts in driving the stocks higher. Additionally, the rounds of data indicate that the economy has been recovering faster than expected from the COVID-19 pandemic.

However, renewed concerns over a second wave of coronavirus disease charged up the bears lately, bringing volatility back in the market. New coronavirus infections soared to alarming new levels across the United States. Per a State Health Department report, 39,327 new infections were reported nationally, surpassing the single-day record of 38,115, set just a day earlier. Texas alone reported a record 5,996 new cases on Thursday, and the state’s rolling average has jumped by 340% since Memorial Day. The rise in new infections has sparked off worries that reopening of businesses and economies could be curtailed again, slowing down the current recovery, which is faster than expected. Further, reemergence of trade tension and International Monetary Fund’s downgrade to economic growth outlook added to the chaos.

Given the recent challenges, the S&P 500 and the Dow Jones are in red from a year-to-date look while the Nasdaq has outperformed, gaining nearly 9% (read: Nasdaq Continues to Excel : 5 Best Stocks in ETF).

As such, several ETFs crushed the market by wide margins on a year-to-date timeframe and carry a solid Zacks ETF Rank #1 (Strong Buy) or 2 (Buy). Below, we have presented a bunch of top-performing ETFs from various corners of the market that are likely to continue outperforming, should the trends prevail.

WisdomTree Cloud Computing Fund WCLD – Up 52.2%

This fund offers exposure to emerging, fast-growing U.S.-listed companies (including ADRs) primarily focused on cloud software and services, and follows the BVP Nasdaq Emerging Cloud Index. It holds 52 stocks in its basket and charges investors 45 bps in fees per year. The product has amassed $402 million in its asset base and trades in average daily volume of 182,000 shares. It has a Zacks ETF Rank #2 (read: Top Sector of 1H & Its Top ETFs).

Invesco NASDAQ Internet ETF PNQI – Up 23%

This fund offers exposure to the largest and most-liquid companies that are engaged in Internet-related businesses by tracking the Nasdaq Internet Index. Holding 89 stocks in its basket, it has AUM of $678.2 million and trades in a lower volume of about 31,000 shares a day. It charges 62 bps in fees per year and carries a Zacks ETF Rank #2 with a High risk outlook.

First Trust Cloud Computing ETF SKYY – Up 21.7%

This fund provides exposure to cloud-computing securities by tracking the ISE Cloud Computing Index. Holding about 65 stocks in the basket, the product has been able to manage $4.4 billion in its asset base while seeing a good volume of about 566,000 shares a day. It has 0.60% in expense ratio and a Zacks ETF Rank #2.

SPDR S&P Internet ETF XWEB – Up 42.1%

This product follows the S&P Internet Select Industry Index, holding 43 stocks in its basket. It charges 35 bps in annual fees and trades in volume of 5,000 shares. With AUM of $23.8 million, the fund carries a Zacks ETF Rank #2 (read: Coronavirus Infections Resurge: Tech ETFs to Thrive).

iShares Expanded Tech-Software Sector ETF IGV – Up 20.6%

This ETF provides exposure to the software segment of the broader U.S. technology space by tracking the S&P North American Expanded Technology Software Index. Holding a basket of 102 securities, the fund charges 46 bps in annual fees and has AUM of $4.8 billion. Volume is good as it exchanges nearly 924,000 shares a day. IGV has a Zacks ETF Rank #1.

First Trust Dow Jones Internet Index Fund FDN – Up 20.5%

This fund follows the Dow Jones Internet Composite Index, giving investors exposure to the broad Internet industry. It holds about 42 stocks in its basket. FDN is the most-popular and liquid ETF in the broad technology space with AUM of $9 billion and average daily volume of around 550,000 shares. It charges 52 bps in fees per year and has a Zacks ETF Rank #2.

SPDR S&P Biotech ETF XBI – Up 16.1%

With AUM of $5.5 billion, XBI provides equal-weight exposure across 134 biotechnology stocks by tracking the S&P Biotechnology Select Industry Index. It has 0.35% in expense ratio and trades in average daily volume of 7.2 million shares. The fund has a Zacks ETF Rank #1.

Invesco QQQ QQQ – Up 13.4%

This ETF provides exposure to 103 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. QQQ is one of the largest and most popular ETFs in the large-cap space with AUM of $111.5 billion and average daily volume of around 52.3 million shares. It charges investors 20 bps in annual fees and has a Zacks ETF Rank #1 (read: 10 Proactively Traded ETFs of First-Half 2020).

Invesco Solar ETF TAN – Up 13.3%

This ETF offers global exposure to 28 solar stocks by tracking the MAC Global Solar Energy Index. U.S. firms dominate the fund’s portfolio with nearly 43.7% share, followed by China (23.9%) and Spain (8.7%). The product has amassed $612.5 million in its asset base and charges investors 71 bps in fees per year. It trades in volume of 427,000 shares and has a Zacks ETF Rank #2 (read: Sector ETFs to Win or Lose if Blue Wave Sweeps U.S. Election).

iShares U.S. Technology ETF IYW – Up 13%

This ETF offers exposure to 162 U.S. electronics, computer software and hardware, and informational technology companies. It tracks the Dow Jones U.S. Technology Capped Index. The fund has AUM of $5.4 billion and charges 42 bps in fees and expenses. Volume is good as it exchanges nearly 191,000 shares a day. The fund has a Zacks ETF Rank #1.

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