Nicholas Vardy compares ETF strategies against the S&P 500 as he analyzes XT, MTUM, and IBLN. He's editor of The Global Guru and other leading newsletters.
Today, you can find ETFs that select stocks based on a broad range of criteria: value, growth, momentum, low volatility, or fundamental or technical analysis.
So it's pretty likely that there is a strategy available that fits you.
Of course, investment strategies go in and out of favor. What worked last year is unlikely to work this year, and what is working today may not work tomorrow.
With that caveat, below are the top three performing ETF investment strategies that I monitor and their returns versus the S&P 500 (SPX) year to date.
iShares Exponential Technologies ETF (XT)
iShares Exponential Technologies ETF invests in nine different "exponential technologies:" big data and analytics, nanotechnology, medicine, networks, energy and environmental systems, robotics, 3-D printing, bioinformatics and financial services.
XT selects and weights these companies according to a Morningstar index. The resulting portfolio is very different from other funds investing in the global tech market.
XT's top three holdings are Kite Pharma, Inc. (KITE), Wipro Limited (WIT) and Tesla Inc. (TSLA).
Year to date, the Exponential Technologies ETF has posted a total return (including dividends) of 20.00%. XT charges 0.47% in annual fees.
iShares Edge MSCI USA Momentum Factor ETF (MTUM)
The iShares Edge MSCI USA Momentum Factor ETF tracks an index of large-cap and mid-cap U.S. stocks. These are selected and weighted based on price appreciation over 6-month and 12-month periods, as well as low volatility over the past three years.
This ETF only holds between roughly 100 and 350 different stocks and makes large sector bets. As such, it carries higher-than-average market risk.
MTUM's top three holdings are Facebook (FB), Amazon.com (AMZN) and Alphabet (GOOGL).
Year to date, MSCI USA Momentum Factor ETF has posted a total return (including dividends) of 19.86%.
MTUM charges a very reasonable 0.15% in annual fees.
Direxion iBillionaire ETF (IBLN)
The Direxion iBillionaire Index ETF tracks an equal-weighted index of 30 U.S. companies. It selects these from the portfolios of 10 asset managers with a personal net worth of at least $1 billion.
IBLN's top three holdings today are Facebook (FB), PayPal Holdings (PYPL) and Amazon.com (AMZN).
Year to date, Direxion iBillionaire ETF has posted a total return (including dividends) of 16.11%. IBLN charges a hefty 0.65% in annual fees.
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