By: Spencer Israel
A look at the top-performing non-leveraged ETFs of 2021 reveals one commonality: the future is now.
Investors are piling into stocks and funds that offer exposure to emerging technologies and industries. Look at the top 10 best-performing (non-leveraged) ETFs of the year. Six are cannabis funds, one is a blockchain fund, one is a 3D printing fund, and one is literally called the “Moonshot Innovators” ETF.
Source: ETFdb.com; Data as of Feb. 14
The outlier of the group is the Breakwave Dry Bulk Shipping ETF, though it should be noted that BDRY is also the only one of the 10 to have net outflows this year.
Other funds at the top of the year-to-date performance and flows charts include funds with exposure to a wide variety of “shiny object” industries, including robotics, AI, clean energy, esports, e-commerce, space, and the ARK Invest family of actively managed growth tech funds. In fact, the ARK Invest family of funds took in over $8 billion in January, ranking second only to Vanguard in terms of issuers.
For these future-focused investments, sentiment could not be more bullish.
In cannabis, for example, investors seem to be buying partly because of the industry’s sweeping legislative victories on election day and partly to front-run the SAFE Banking Act and potential legalization at the federal level.
The Amplify Transformational Data Sharing ETF (BLOK) is benefitting from what appears to be a shift in how institutional investors view cryptocurrency. Top holdings like MicroStrategy, Marathon Patent Group, and Riot Blockchain are all up more than 150% in 2021 as Wall Street’s largest banks and institutions prepare to enter the space. Canada even approved the first true bitcoin ETF last week.
Of course, we all know this won’t last forever. And as is usually the case with any high-flying trade, the rip-roaring rally is interspersed by periods of extreme volatility. Take what happened last week, when the six cannabis ETFs above fell 16-30% in the span of two days.
There will come a day when this trend ends, and other factors—be it value, defensive, or low-beta—will rule the day. But for now, traders and investors seem content to buy into the future, regardless of if that day ever comes.
The author is long the S&P 500 in his retirement accounts.
Active Trading with Lightspeed
Lightspeed provides professional traders with all the tools required to help them find success in stock trading, and we have been developing and honing our active trader platform to offer an optimal user experience. With the intuitive interface layouts and institutional quality stock and options scanners, we aim to help traders reach their goals, no matter what their strategy is. We also offer our clients some of the lowest trading fees in the industry.
Lightspeed Financial Services Group LLC is not affiliated with these third-party market commentators/educators or service providers. Data, information, and material (“content”) are provided for informational and educational purposes only. This content neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities or contracts. Any investment decisions made by the user through the use of such content is solely based on the users independent analysis taking into consideration your financial circumstances, investment objectives, and risk tolerance. Lightspeed Financial Services Group LLC does not endorse, offer nor recommend any of the services or commentary provided by any of the market commentators/educators or service providers and any information used to execute any trading strategies are solely based on the independent analysis of the user.
Copyright © 2001-2021, Lightspeed, LLC. All Rights Reserved.