ETFs
5 ETFs up more than 30% in 1 hour
This year is proving to be a banner year for the stock market, with the S&P 500 Index and Nasdaq Composite Index hitting a series of record highs. The S&P 500 has now crossed the 5,500 level for the first time after reaching the 5,400 threshold earlier this month and the 5,300 level last month, highlighting strong confidence (read: S&P 500 hits the 5,400 level : the 5 best performing stocks in ETFs).
Bets on falling rates, strong corporate profit growth, rising Magnificent Seven stocks and the current craze for artificial intelligence (AI) have driven this year’s rally and will continue to do so for the rest of the year.
The winners are spread across all sectors, with technology being the standout, seeing massive gains this year. We have presented a set of top-performing ETFs from various market segments that gained more than 30% in the first half of 2024. These are VanEck Vectors Semiconductor ETF SMH, First Trust SkyBridge ETF for the Crypto Industry and Digital Economy CRPT, Invesco S&P 500 Momentum ETF SPMO, Gabelli Growth Innovators ETF GGRW and Roundhill Magnificent Seven ETF MAGS.
Behind the strong performance
The “Magnificent Seven” are the main growth driver of rising stock markets. It now represents 31% of the weight of the S&P 500. The expansion of AI applications promises to pave the way for new growth opportunities. According to a new report by Grand View Research, the global artificial intelligence market is expected to witness a CAGR (2024-2030) of 36.6% to reach $811.75 billion by 2030 and continue to drive the market higher (read: Bet on the AI ecosphere with These ETFs).
Additionally, large-cap stocks have demonstrated strong resilience in the face of periods of higher-than-expected interest rates. This is because these stocks are less volatile, generate a constant dividend stream and offer stability. Large-cap companies, especially those with pricing power, can better cope with inflationary pressures by passing costs on to consumers. This makes them attractive to investors looking for inflation protection amid persistent inflation.
At the latest FOMC meeting that ended yesterday, U.S. policymakers forecast just one rate cut for this year and forecast four cuts for 2025. Low rates are generally good for stocks because they reduce the cost of borrowing, often necessary to finance business expansion. Lower rates generally reduce the attractiveness of fixed-income investments like bonds, prompting investors to seek higher returns in stock markets.
Let’s look at the details of the ETFs mentioned above:
VanEck Vectors Semiconductor ETF (SMH) – Up 53.8%
The VanEck Vectors Semiconductor ETF provides exposure to companies involved in semiconductor production and equipment. It tracks the MVIS US Listed Semiconductor 25 Index and holds 26 stocks in its basket. VanEck Vectors Semiconductor ETF has managed assets worth $24 billion and charges 35 basis points in annual fees and expenses. SMH trades an average daily volume of 7 million shares and has a Zacks ETF Rank #1 (Strong Buy) with a High Risk Outlook (read: ETFs to Trade as NVIDIA Becomes the Most Valuable Company).
First Trust SkyBridge Crypto Industry & Digital Economy ETF (CRPT) – Up 47.9%
The First Trust SkyBridge Crypto Industry and Digital Economy ETF is designed to provide exposure to companies that SkyBridge believes are driving innovation related to cryptocurrency, crypto assets and the digital economy. SkyBridge identifies stocks primarily through a “bottom-up” search focused on finding leading companies in the crypto industry ecosystem. The First Trust SkyBridge Crypto Industry & Digital Economy ETF holds 30 stocks in its basket and charges investors 85 basis points in fees per year. He has amassed $63.4 million in assets and trades an average daily volume of 62,000 shares.
Invesco S&P 500 Momentum ETF (SPMO) – Up 34.5%
The Invesco S&P 500 Momentum ETF tracks the S&P 500 Momentum Index, which measures the performance of stocks in the S&P 500 Index that have a high “momentum score.” It holds 101 stocks in its basket and charges 13 basis points in fees per year. Information technology is the leading sector with a 51.2% share, while consumer discretionary, communication services and healthcare round out the next three spots. assets under management of $1.9 billion and trades an average daily volume of 324,000 shares.
Gabelli Growth Innovators ETF (GGRW) – Up 33.3%
Gabelli Growth Innovators ETF is an actively managed fund that seeks to invest in companies in secular growth industries whose competitive moats will enable outsized market share gains and whose future cash flows are undervalued at current market prices, according to the portfolio manager. The Gabelli Growth Innovators ETF has amassed $5.3 million in its asset base and trades an average daily volume of 2,000 shares. The product has an expense ratio of 0.90%.
Roundhill Magnificent Seven ETF (MAGS) – Up 33.2%
The Roundhill Magnificent Seven ETF is the first-ever ETF that provides investors with equal-weighted exposure to “Magnificent Seven” stocks. It has amassed $436.7 million in its asset base and charges 29 basis points in fees annually. MAGS trades an average daily volume of 200,000 shares.
The story continues
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VanEck Semiconductor ETF (SMH): ETF Research Reports
Invesco S&P 500 Momentum ETF (SPMO): ETF Research Reports
Roundhill Magnificent Seven ETF (MAGS): ETF Research Reports
Gabelli Growth Innovators ETF (GGRW): ETF Research Reports
First Trust SkyBridge Crypto Industry and Digital Economy ETF (CRPT): ETF Research Reports