Despite this year's severe decline in the stock and bond markets with around 20% decline in the S&P500 and around 34% decline in the NASDAQ, marking the largest decline since WWII, the United States saw record trading volume, the second-largest flows, and new exchange-traded fund debuts. Around $396 billion throughout the first three quarters of the year, with the third largest ETF in the world, the Vanguard S&P 500 ETF (NYSEARCA:VOO), bringing in $36.58B. Going into 2023, retail investors are quite enthusiastic about tech stocks, which is good news for linked ETFs as well. A recent study by the London-based investing insights platform Finimize of more than 2,000 retail investors in Europe, Asia, and the US found that only 1% of these investors expect to sell their holdings in the coming year, while 65% aim to continue investing and 29% aim to expand their portfolios.
Let’s start by understanding quickly what are ETFs. They were first introduced in 1993, and an ETF is basically a basket of open-funded pooled securities traded on stock exchanges managed by brokerage firms; the first was the US fund S&P's Depositary Receipts (SPDRs) known as spiders. An ETF tracks commodities, indices, other assets, or even specific investment strategies. One ETF can be compromised of stocks from one industry or from several ones. Most ETFs are index funds in which they hold the same securities in the same proportions as a specific stock or bond market index. The best type of ETF changes according to the investor's unique goals and strategies, whether the objective is to trade for the short term or invest in the long term, or the investor's risk appetite. Therefore, the best type changes from one investor to another.
This article will introduce you to some of the top-performing ETFs available to be traded on CFI’s trading platforms as CFDs on ETFs during 2022 according to the highest percentage of YTD returns since the beginning of 2022.
|
ETF Name |
YTD Return |
Div Yield |
52 Week Low- High |
|
Direxion Daily 20+ Year Treasury Bear 3x Shares (TMV) |
141.85% |
- |
$55.78-183.13 |
|
Direxion Daily Energy Bull 2X Shares (ERX) |
127.72% |
2.23% |
$29.68-80.27 |
|
iShares MSCI Turkey ETF (TUR) |
106.72% |
1.97% |
$17.2-37.46 |
|
iShares U.S. Oil & Gas Exploration & Production ETF (IEO) |
57.03% |
3.77% |
$61.39-106.3599 |
|
Fidelity MSCI Energy Index ETF (FENY) |
69.5% |
3.33% |
$15.2-25.98 |
|
Energy Select Sector SPDR Fund (XLE) |
69.5% |
3.68% |
$55.55-94.71 |
|
Vanguard Energy ETF (VDE) |
69.55% |
3.65% |
$77.71-132.625 |
iShares U.S. Energy ETF (IYE)
|
67.6% |
3.37% |
$30.12-50.7471 |
Only 6% of the 2,754 ETFs listed in the U.S. as of the end of Q3 (excluding leveraged and inverse products), or 161 ETFs, had positive absolute gains in the 2022 YTD, according to CFRA. As you can notice, the energy sector beat all other sectors. At the same time, some of the worst 2022 returns have been produced by high beta, tech-focused ETFs including financial, mining for bitcoins, and internet shopping.
it is important to consider several factors when dealing with ETFs; the cost, risk, benefits, and investment strategies associated with the ETFs, the level of assets held by the ETF of a common threshold of USD 10 Million to avoid poor liquidity, and wide spreads. Also, an investor should consider the trading volume, the underlying securities, the tracking error, and the market position of the ETF before deciding to invest.
The content published above has been prepared by CFI for informational purposes only and should not be considered as investment advice. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell. The information provided does not have regard to the specific investment objectives, financial situation, and needs of any specific person who may receive it, and is not held out as independent investment research and may have been acted upon by persons connected with CFI. Market data is derived from independent sources believed to be reliable, however, CFI makes no guarantee of its accuracy or completeness, and accepts no responsibility for any consequence of its use by recipients.