Top Performing U.S. ETFs to Start the Year
The new year has begun with a rough start for many popular stock and bond funds, but there are still several exchange-traded funds (ETFs) that are seeing significant returns. Here are the top five performing U.S. ETFs with at least $100 million in assets under management, excluding leveraged or inverse funds:
1. United States Natural Gas Fund (UNG)
The UNG has been the standout performer in the first three days of the year, surpassing all other ETFs. This fund invests in natural gas futures contracts, which have experienced a surge in value recently. However, it’s important to note that commodity prices can be volatile, and the UNG’s returns may fluctuate if natural gas prices change direction.
2. ETFMG U.S. Alternative Harvest ETF (MJUS)
MJUS tracks marijuana stocks, a sector known for its volatility. While this ETF has historically underperformed, it occasionally enjoys sharp rallies.
3. AdvisorShares Pure US Cannabis ETF (MSOS)
Similar to MJUS, MSOS focuses on marijuana stocks. Although it has been a long-term underperformer, it also experiences occasional substantial gains.
4. ProShares Bitcoin Strategy ETF (BITO)
BITO tracks bitcoin futures and has been on a hot streak in recent months. The rally in bitcoin futures is driven by expectations of the launch of spot bitcoin ETFs in the U.S., which could potentially compete with BITO.
5. AGF U.S. Market Neutral Anti-Beta Fund (BTAL)
BTAL stands out as a more complex fund on the list. It utilizes long and short positions to counterbalance broad equity funds in investor portfolios. In volatile or declining markets, alternative investment strategies like BTAL can perform well. However, they can also be costly in the long run, with BTAL having a net expense ratio of 1.43%.
Hot Take: Diverse Strategies Fuel Strong Start for U.S. ETFs
The start of the year has seen some popular funds struggle, but various ETFs are delivering impressive returns. The United States Natural Gas Fund leads the pack, driven by surging natural gas futures. Marijuana-focused ETFs, such as ETFMG U.S. Alternative Harvest and AdvisorShares Pure US Cannabis, have also experienced notable gains despite their historical underperformance. Additionally, the ProShares Bitcoin Strategy ETF has been riding the wave of bitcoin futures’ success, although it may face competition from potential spot bitcoin ETFs in the future. Finally, the AGF U.S. Market Neutral Anti-Beta Fund offers a more complex strategy that aims to counterbalance broad equity funds in volatile markets. However, it’s important to consider the costs associated with these alternative investment approaches.
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