Introduction
Exchange-Traded Funds (ETFs) have become a staple in the modern investor’s portfolio. Offering a blend of diversification, cost-effectiveness, and flexibility, ETFs allow individuals to invest in a wide range of assets without the complexities of direct stock picking. As we look into 2024, several ETFs have stood out for their remarkable performance, offering investors significant returns.
What is an ETF?
An ETF, or Exchange-Traded Fund, is a type of investment fund that holds a collection of assets such as stocks, bonds, or commodities. These funds are traded on stock exchanges, much like individual stocks, providing investors with a convenient way to gain exposure to a broad market segment or specific investment strategy.
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Benefits of Investing in ETFs
Diversification
One of the key advantages of ETFs is their diversification. By holding a basket of different assets, ETFs can spread risk across multiple investments, reducing the impact of any single asset’s poor performance on the overall portfolio.
Cost-Effectiveness
ETFs usually have lower expense ratios than mutual funds, making them a more cost-effective choice for investors. This means more of your money is working for you, rather than being eaten up by management fees.
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Flexibility and Liquidity
Since ETFs are traded on stock exchanges, they can be bought and sold throughout the trading day at market prices. This provides investors with greater flexibility and liquidity compared to mutual funds, which are only traded at the end of the trading day.
Top 10 Best-Performing ETFs of 2024
In 2024, the stock market has shown robust performance, with the S&P 500 gaining over 13% by mid-year. This bullish trend has benefited several high-risk, high-reward ETFs. The following list highlights the best-performing ETFs of 2024, all of which have delivered gains at least double that of the broader S&P 500.
| ETF | EXPENSE RATIO | ASSETS UNDER MANAGEMENT | YEAR-TO-DATE PERFORMANCE* |
| Valkyrie Bitcoin Miners ETF (ticker:Â WGMI) | 0.75% | $133 million | 23.4% |
| VanEck Digital Transformation ETF (DAPP) | 0.51% | $121 million | 23.5% |
| Bitwise Crypto Industry Innovators ETF (BITQ) | 0.85% | $141 million | 23.8% |
| Invesco S&P 500 Momentum ETF (SPMO) | 0.13% | $1.9 billion | 29.8% |
| Roundhill Magnificent Seven ETF (MAGS) | 0.29% | $513 million | 30.9% |
| iShares MSCI Turkey ETF (TUR) | 0.59% | $266 million | 33.8% |
| ProShares Ether Strategy ETF (EETH) | 0.95% | $102 million | 34.1% |
| VanEck Semiconductor ETF (SMH) | 0.35% | $22.9 billion | 37.1% |
| ProShares Bitcoin Strategy ETF (BITO) | 0.95% | $1.8 billion | 52.9% |
| Grayscale Bitcoin Trust (GBTC) | 1.5% | $16.5 billion | 73.1% |
1. Valkyrie Bitcoin Miners ETF (WGMI)
Expense ratio: 0.75%
Assets under management: $133 million
Year-to-date performance: +23.4%
The Valkyrie Bitcoin Miners ETF invests in companies involved in cryptocurrency mining, akin to investing in gold or silver miners. Key holdings include Iris Energy Ltd. (IREN) and Cleanspark Inc. (CLSK), both of which have seen significant gains.
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2. VanEck Digital Transformation ETF (DAPP)
Expense ratio: 0.51%
Assets under management: $121 million
Year-to-date performance: +23.5%
The VanEck Digital Transformation ETF focuses on companies that are integral to the Web 3.0 economy. Notable holdings include Block Inc. (SQ) and Marathon Digital Holdings Inc. (MARA), making it a tactical play for those interested in the digital economy’s future platforms.
3. Bitwise Crypto Industry Innovators ETF (BITQ)
Expense ratio: 0.85%
Assets under management: $141 million
Year-to-date performance: +23.8%
Bitwise Crypto Industry Innovators ETF holds about 30 stocks in the crypto industry, including MicroStrategy Inc. (MSTR) and Coinbase Global Inc. (COIN). This ETF allows investors to gain indirect exposure to the crypto market’s growth.
4. Invesco S&P 500 Momentum ETF (SPMO)
Expense ratio: 0.13%
Assets under management: $1.9 billion
Year-to-date performance: +29.8%
SPMO tracks the top 100 stocks in the S&P 500 based on momentum factors. This strategy has paid off well in 2024, delivering nearly twice the returns of the broader S&P 500.
5. Roundhill Magnificent Seven ETF (MAGS)
Expense ratio: 0.29%
Assets under management: $513 million
Year-to-date performance: +30.9%
MAGS focuses on a limited portfolio of seven top-performing stocks: Nvidia Corp. (NVDA), Alphabet Inc. (GOOGL), Apple Inc. (AAPL), Tesla Inc. (TSLA), Amazon.com Inc. (AMZN), Meta Platforms Inc. (META), and Microsoft Corp. (MSFT). This high-risk, high-reward approach has yielded impressive results in 2024.
6. iShares MSCI Turkey ETF (TUR)
Expense ratio: 0.59%
Assets under management: $250 million
Year-to-date performance: +36%
Despite economic volatility, Turkey’s central bank has made strides in controlling inflation, benefiting the iShares MSCI Turkey ETF. This fund provides exposure to a region with few other investment options.
7. ProShares Ether Strategy ETF (EETH)
Expense ratio: 0.95%
Assets under management: $102 million
Year-to-date performance: +34.1%
EETH, the first U.S. ETF to allow exposure to Ether, invests in Ether futures rather than the cryptocurrency itself. Despite not tracking Ether’s performance precisely, it has still seen substantial gains.
8. VanEck Semiconductor ETF (SMH)
Expense ratio: 0.35%
Assets under management: $22.9 billion
Year-to-date performance: +37.1%
The semiconductor sector has been thriving in 2024, with SMH leading the charge. Key holdings include Nvidia and Taiwan Semiconductor Manufacturing Co. Ltd. (TSM), making this ETF a strong performer.
9. ProShares Bitcoin Strategy ETF (BITO)
Expense ratio: 0.95%
Assets under management: $1.8 billion
Year-to-date performance: +52.9%
BITO invests in Bitcoin futures and has benefited from Bitcoin’s significant rise in 2024. While it doesn’t invest directly in Bitcoin, it provides exposure to its price movements.
10. Grayscale Bitcoin Trust (GBTC)
Expense ratio: 1.5%
Assets under management: $16.5 billion
Year-to-date performance: +73.1%
GBTC offers direct exposure to Bitcoin and has been one of the top performers in 2024. Despite higher fees, it remains a popular choice for investors seeking Bitcoin exposure.
Conclusion
ETFs have proven to be a valuable tool for investors looking to diversify their portfolios and capitalize on market trends. The best-performing ETFs of 2024 have delivered exceptional returns, showcasing the potential for growth in various sectors. Whether you’re interested in cryptocurrencies, technology, or emerging markets, there’s an ETF to suit your investment strategy.
FAQs
What factors should I keep in mind when choosing an ETF?
When selecting an ETF, consider the expense ratio, assets under management, the ETF’s holdings, and its historical performance. It’s also important to align the ETF’s investment strategy with your own financial goals.
How do expense ratios impact my returns?
Lower expense ratios mean that less of your investment is used to cover management fees, allowing more of your money to stay invested and grow over time.
Are ETFs suitable for all investors?
ETFs can be suitable for a wide range of investors, from beginners to experienced traders. Their diversity, liquidity, and cost-effectiveness make them a versatile investment tool.
How do ETFs differ from mutual funds?
ETFs are traded on stock exchanges and can be bought and sold throughout the trading day, while mutual funds are traded only at the end of the trading day. ETFs typically have lower expense ratios than mutual funds.
Can I invest in ETFs with a small budget?
Yes, many ETFs have low share prices, making them accessible to investors with small budgets. Some brokers also offer fractional shares, allowing you to invest any amount of money into an ETF.
