Since their inception in the early 1980s, exchange-traded funds (ETFs) have grown in popularity among investors, especially individual ones. Perhaps their unique characteristics of combining a range of diversified portfolios and the ease of trading as a single stock in a stock exchange explain their wide acceptance. In most stock markets around the world, ETFs shares can be bought on margin, short-sold, or even held for the long-term. This provides diverse opportunities for investors. My article aims to identify the top 25 ETFs in the US and other international markets to help in your investment decisions for the year 2017.
Top 25 ETFs in 2017 That You Need to Know About
ETFs come as a basket of securities that you can buy or sell at a brokerage firm or a stock exchange. There is an estimated $1 trillion worth of investments in ETFs. Moreover, there are nearly one thousand ETF products in the US bourses alone.
ETFs track indexes like the Dow Jones, S&P 500, FTSE, and NASDAQ-100 among many others. As NASDAQ explains, ETFs do not try to outperform their corresponding indexes nor beat the market. Instead, they strive to replicate the market owing to their unique feature of passive management. Here are the top 25 ETFs to watch out for in 2017.
I have broken them down into categories for you, for a better understanding.
Top 4 Social Media and Telecommunications ETFs
1. iShares U.S. Telecommunications ETF (IYZ) by BlackRock. It has an expense ratio of 0.47%. Also, it manages close to $320 million worth of assets. Total net asset value returns for this fund stand at almost 10% per annum.
2. Fidelity MSCI Telecommunication Services Index ETF (FCOM) by Fidelity Investments currently trades at around $32 with an expense ratio of 0.08%. Total assets under management exceed over $113 million with 14% annual returns.
3. Global X Social Media Index (SOCL) tracks social media companies globally. It currently trades at over $28 at NASDAQ with an average annual gain of 50% and an expense ratio of 0.1%.
4. Vanguard MSCI Europe ETF (VGK) consists of 462 companies in Europe. It seeks to track their risk exposure to US telecommunication firms. Also, it currently trades at around $56 and has a 3-month return on investment (ROI) of slightly over 13%.
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5 Best Performing Software and Semiconductor ETFs
5. PowerShares Dynamic Semiconductors Portfolio ETF (PSI) currently trades at about $45. Past performance indicates annual returns of 70.92%. This makes it one of the top 25 ETFs for 2017.
6. iShares PHLX Semiconductor ETF (SOXX) is a notable semiconductor fund with an expense ratio of 0.48%. It has an annual gain of 58.44%. It is priced at around $147.
7. Direxion Daily Semiconductor Bull ETF (SOXL) has returned a total of 248.79% since inception in 2010. Its current expense ratio is 1.1% with a net asset value of 76.41.
8. First Trust NASDAQ Semiconductor ETF (FTXL) is among the most recent funds trading at around $26. The expense ratio is 0.6%. Its average spread is 0.48% with over $20 million assets under management.
9. VanEck Vectors Semiconductor ETF (SMH) currently trades at $85.48. The expense ratio is 0.36% and annual returns are north of 52%.
4 Most Attractive Technology ETFs
10. First Trust NASDAQ-100-Technology Sector Index ETF (QTEC) replicates the NASDAQ-100 Technology Index. It currently trades at around $68 with an expense ratio of 0.6%. Its assets total to 42.1 billion.
11. SPDR Morgan Stanley Technology ETF (MTK) is available at the NYSE Arca at $73.60. Its total assets are worth at $719.87 million. Its return on equity stood at 15.16% on May 25, 2017, with annual returns of 37.88%.
12. iShares Dow Jones US Technology ETF (IYW) comprises of US software, hardware, electronics and other IT companies. It has a 1-year return of 25.92% with an expense ratio of 0.44%.
13. PowerShares DWA Technology Momentum Portfolio ETF (PTF) tracks US tech firms. It has an expense ratio of 0.6%. It manages sizeable daily trading volumes at a current price of $47.68.
Top 3 International Information and Technology ETFs
14. iShares S&P Global 100 Index ETF (IOO) tracks global technology equities. It has been on the rise since the beginning of 2017. It currently trades at $85.68 with annual returns of 19.7%.
15. iShares North American Tech-Software ETF (IGV) exposes investors to a broad range of software companies. It currently sells at around $138.50. Analysis of past performance shows an annual return of 25.82%.
16. SPDR S&P Telecom ETF (XTL) is an international telecommunications index fund by State Street Global Advisors with an expense ratio of 0.4%. It has almost $40 million total assets under management. Analysis shows it has 1-year returns of over 25% and 5-year returns on just above 14%.
Top 2 International Real Estate Investment Trust (REIT) ETFs
17. Vanguard Global ex-U.S. Real Estate ETF (VNQI) is pegged on REITs from over 30 countries. This makes it one of the top 25 ETFs for 2017. With over $4.23 billion in assets, it trades at an expense ratio of 0.15%. It is currently priced at around $56.14.
18. WisdomTree Global ex-US Real Estate ETF (DRW) is a dividend-weighted international fund for global real estate firms. It boasts of assets north of $18 million and an expense ratio of 0.58%. It trades at a current price of about $30 per share.
Top 4 US Real Estate and Mortgage ETFs
19. Schwab U.S. REIT ETF (SCHH) is a market-cap-weighted index fund that excludes mortgage REITs and real estate finance companies. Its expense ratio stands at 0.07% with a P/E ratio of 37.06 and total assets exceeding $3 billion.
20. Fidelity MSCI Real Estate ETF (FREL) is a more comprehensive cap-weighted fund incepted as recently as in 2015. With an expense ratio of 0.08% and P/E ratio of 40.08, it also lists as one of our top 25 ETFs.
21. VanEck Vectors Mortgage REIT Income ETF (MORT) tracks US mortgage REITS. Currently trading at $24, it has an expense ratio of 0.41%.
22. iShares Mortgage Real Estate Capped ETF (REM) is among the best liquidity trading mortgage ETF funds. It has an expense ratio of 0.48% and total assets worth $1.35 billion. Therefore, it makes it in our list of top 25 ETFs.
Best Performing Growth Segment ETFs
23. Vanguard S&P 500 Growth ETF (VOOG) tracks the Standard & Poor’s 500 Growth Index returns. It is currently trading at about $126 with an expense ratio of 0.15%.
24. iShares Core S&P US Growth ETF (IUSG) currently trades at $48.5 with annual returns of 20% and an expense ratio of 0.05%.
25. Schwab U.S. Large-Cap Growth ETF (SCHB) tracks the performance of the Dow Jones U.S. Large-Cap Growth Total Stock Market Index. It currently trades at about $63 with a market cap of $4 billion and an expense ratio of 0.04%.
It is clear, therefore, that the top 25 ETFs for 2017 are distributed across social media, technology, real estate, and growth segments. Some key aspects of interest while assessing ETFs include annual returns, expense ratios, price to earnings (P/E) ratios, and price per share of the funds. Different brands of ETFs exist. They can follow local or international indexes providing you with diversified, tax-efficient and low-cost investment options. For 2017, look for ETFs with good daily trading volumes. Feel free to share your experiences, questions, and thoughts.