ETFs
Analysts still see upside potential for these top-performing ETFs and funds
The first half of the year was generally good for the market, with the S&P 500 and Nasdaq hitting record highs several times. Year to date, the S&P 500 is up about 13% and the Nasdaq is up 14.9%. Will the markets continue to soar? Analysts are divided because it is unclear when the US Federal Reserve will begin cutting rates. Much will depend on how inflation data develops in the coming months. “The US recession is not on the agenda for the next six months, and leading economic indicators suggest a broadening of global growth, which undermines the narrative of American exceptionalism,” said Thomas Poullaouec, head of multi-asset solutions for Asia Pacific at T. Rowe Price. said Tuesday. He added that “the future evolution of inflation is key to successfully navigating the second half of the year. Inflation has been difficult to predict since the pandemic began in 2020. However, it is becoming clear that inflation will not decline as quickly as expected. ” Ed Clissold, chief US strategist at Ned Davis Research, believes that conditions could allow the Fed to “cut rates at a slow pace”, believing that economic growth could moderate without turning negative. In this uncertain context, Investors could look to exchange-traded funds or mutual funds to diversify their investments. CNBC Pro looked at the 20 best-performing U.S.-domiciled ETFs and actively managed funds in the first half of this year for those. with additional upside potential Morningstar provided the list of top-performing funds, all of which beat the S&P 500. Using FactSet, this list was selected for funds that analysts assign with upside potential. 10% or more and at least half giving a buy rating Copper and mining ETFs have been big winners in the first half of this year, with four in the top 20. However, of the four. , only two meet the selection criteria: the Sprott Junior Copper Miners ETF and the Global X Copper Miners ETF. The former stood out as having the highest upside potential on the list (45.8%) and a high Buy rating (79%). Unsurprisingly, growth-oriented funds also dominated the list, as the boom in technology and artificial intelligence continued to push markets higher this year. One country-specific ETF has been added to the list: the iShares MSCI Turkey ETF. It was among the top five half-year returns, at 29.55% as of May 31. It also has the second highest upside potential at 25.7% and a decent 70% Buy rating. A category that isn’t typically a favorite among investors also appeared: the First Trust RBA American Industrial Renaissance ETF, which focuses on small and mid-cap stocks. It tracks the Richard Bernstein Advisors American Industrial Renaissance Index, which measures the performance of small- and mid-cap U.S. companies in the industrial and community banking sectors.