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June 28, 2023 at 01:54 PM
The role of technology stocks in driving the market rally in this year’s first half is evident in the outsized showing from tech-oriented exchange-traded funds.
Nineteen of the 20 top-performing ETFs recorded triple-digit percentage point returns year-to-date through June 26, according to data from Morningstar Direct.
ETFs invested in artificial intelligence, cryptocurrency, crypto technology and related holdings, comprise almost the entire list.
Investors should note that among these top performers are numerous leveraged ETFs — funds that can outpace the performance of a particular stock or index by two or three times (or whatever the stated goal) by using derivatives such as swaps.
While these ETFs can result in outsize gains, they also bring the risk of excess losses compared with the underlying indexes or stocks. They also tend to bring higher expenses, which reflect the costs associated with their need to constantly rebalance holdings to maintain target exposures.
Single-stock ETFs, a format that debuted last year, also feature heavily on this list. While these funds have alarmed regulators due to their use of leverage, they have attracted hundreds of millions of dollars in assets, according to Bloomberg.
Check out the slideshow for a look at these top performers. Statistics come from Morningstar Direct and portfolio holdings from Morningstar.com, except where noted otherwise.
Slides: Credit: Chris Nicholls/ALM
Slideshow
