Best performing ETFs to buy in 2023
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The best performing ETFs not only generate substantial gains for investors but also offer access to a diverse range of stocks. Buying the top ETF performers is no easy feat, that’s why our experts have selected their top picks for the year ahead. Continue scrolling to learn more.
What are the top performing ETFs to buy?
In the table below you will find out experts’ top ETF picks for the coming year. We’ve included their ticker symbols and names and you can continue reading to learn more about each one in detail.
| # | ETF symbol | ETF name | Where to Trade |
|---|---|---|---|
| 1 | ARKW | ARK Next Generation Internet ETF | |
| 2 | TAN | Invesco Solar ETF | |
| 3 | SOXX | iShares Semiconductor ETF | |
| 4 | VGT | Vanguard Information Technology ETF | |
| 5 | LIT | Global X Lithium & Battery Tech ETF |
1. ARK Next Generation Internet ETF (NYSEARCA: ARKW)
Taking top spot on our list is the ARK Next Generation Internet ETF. The fund, which was set up in 2014 by Cathie Wood’s ArkInvest, has been one of the top performing ETFs over the past few years. Since the turn of the decade, it has generated over 200% in gains and over 800% since its inception. Although it has fallen slightly since.
ARKW is an actively managed ETF that seeks long-term capital growth by investing in U.S. and foreign stocks that are relevant to the funds investment theme of the next generation internet. With under 50 holdings it includes many well known companies including Tesla, Twitter, and Coinbase.
It employs a tiered weighting system meaning some of its holdings can have a stronger impact on its overall performance. Similarly, its geographical spread is heavily geared to US based companies. Buying shares in ARKW could be a good idea, especially as it has proven its ability to perform well in all conditions when other ETF’s have struggled.
2. Invesco Solar ETF (NYSEARCA: TAN)
The Invesco Solar ETF tracks the performance of the MAC Global Solar Energy Index. As its name suggests, it invests in companies that are in the solar energy industry. It’s been a top performing ETF and since the start of the decade its racked up gains of over 600%, although has fallen off a little since.
Its strong performance is largely attributed to its focus on clean energy, which in recent years has experienced a revival in interest. With around 50 holdings, it allocates more money to the companies it believes will perform best. Nearly 30% of the fund is spread across just three businesses, making it susceptible to difficult periods should any of them struggle.
Its top three holdings are SolarEdge Technologies Inc, Enphase Energy Inc, and SunRun Inc. It is considered a mid cap ETF and almost half of the fund belongs to USA based businesses. However, it includes many small cap stocks in Europe and emerging markets around the world.
3. iShares Semiconductor ETF (NASDAQ: SOXX)
Third place on our list goes to the iShares Semiconductor ETF which seeks to track the performance of the ICE Semiconductor Index. Since its inception over 20 years ago in 2001, it has performed very well and its price has increased by nearly 800%. More recently, its strong gains have continued and the past five years have seen nearly 300% added to its value.
SOXX gives exposure to U.S. companies that design, manufacture, and distribute semiconductors. With just 30 stocks in its holdings, it is one of the smallest ETFs on our list, however it includes some of the largest players in the semiconductor industry. Its tired weighting system means its best performing stocks make up the bulk of the fund.
A quarter of the ETF belongs to its top three holdings which include Broadcom, Qualcomm, and Nvidia. Some other notable stocks it owns are Intel and Taiwan Semiconductor Manufacturing. With the global semiconductor industry in hot demand, the iShares ETF could continue its strong performance in the coming year.
4. Vanguard Information Technology ETF (NYSEARCA: VGT)
The Vanguard Information Technology ETF tracks the performance of the MSCI US Investable Market Information Technology index. It holds stocks of all cap sizes within the technology industry. It invests in companies in the U.S. and includes stocks of companies that service the electronics and computer industries.
Its performance has been solid, especially from its inception in 2004 and it has generated nearly 800% in gains since. More recently, the fund has grown by over 200% in five years. As it’s in the technology sector, it’s heavily invested in some of the largest companies in the world. Apple, Microsoft, and Nvidia are just three of its investments known as tech titans.
VGT contains over 300 stocks although over half of the fund belongs to its top ten holdings and nearly 40% is held by just two stocks; Apple and Microsoft. While it is weighted towards just a few companies, it includes a broad range of smaller stocks within the technology sector and offers some diversification.
5. Global X Lithium & Battery Tech ETF (NYSEARCA: LIT)
Taking last place on our list is The Global X Lithium & Battery Tech ETF. Created in 2010, the fund seeks to track the performance of the Solactive Global Lithium Index. It invests in companies involved in the full lithium cycle, from mining and refining the metal, through battery production.
LIT is geographically diverse and invests in stocks from around the world, although China and the U.S. is where around 60% of its holdings are. Similar to the other ETFs on our list, it operates a tired weighting system and its top ten stocks amount to over 50% of the total fund.
Some of its biggest holdings include electric vehicle manufacturer Tesla and Albemarle, one of the largest lithium suppliers for batteries. LIT has been a top performing ETF, especially since 2020 and has seen a rise of over 250%. As electric vehicles start gaining popularity, demand for lithium looks set to rise and buying shares in LIT could be a good idea.
Where to buy the best performing ETFs
To buy shares in the best performing ETFs you will first need to register with an online broker. In the table below, our experts have selected some of the top ETF brokers around. Simply click the links below to register in just a few minutes.
What is a performing ETF?
It’s an exchange traded fund that has performed better than others in recent years. In the case for this page, we have used the best performing ETFs for the past five years while excluding leveraged and inverse funds. The top performers can come from any industry, sector, and geography.
When a specific industry is performing particularly well, it’s likely that an ETF focusing on the same will also do well. That’s been the case for the funds we have selected above. Clean energy, financials, and technology have been experiencing strong gains recently and that has been reflected in some of the best ETFs.
Are performing ETFs a good investment?
Yes they can be, but its key to remember that past performance is no indication of future results. However, the best performing ETFs have a lot in their favour. Most notably they have a long history of success and focus on in demand industries or sectors. Investing in the best performing ETFs could be a good idea as it’s an easy way to gain exposure to a large number of stocks that are doing well.
Buying shares in an ETF is a simple process and a popular investment choice for many investors. Whatever you decide to do, it’s a good idea to keep up to date with the latest market news and analysis which you can do by clicking the links below. You’ll also need to register with a top broker to buy an ETF and you can click the blue button below to sign up.
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