The 20 Top-Performing ETFs -- and Why You Shouldn't Buy Them
The winners list is filled with all sorts of funds that most of us have no business owning.
The table below contains a roster of top-performing exchange-traded products of all stripes. For reasons that will become clear in a moment, those returns should tell you to run away.
The winners are as exotic a crew of exchange-traded funds and exchange-traded notes as you’re ever likely to find, from leveraged funds that seek to triple the return of an index to those that bet against the price of silver. The top performer, the Elements Spectrum note, follows a complex strategy based on the daily results of the 10 sectors of Standard & Poor’s 500-stock index.
What’s wrong with buying a red-hot ETF? For starters, in most cases you’ll have to make a call on a narrow sector or market. Do you really have special insights into small Indian companies or the coffee market? Okay, place your bets. Second, the volatility of these funds is off the charts. For example, Direxion Daily Semiconductor Bull 3x ETF dived 43% during the market’s 7% decline in September and October.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Finally, leveraged ETFs can only promise to meet their goals on a daily basis. Because of the peculiarities of daily compounding, the results can be surprising. In 2011, for example, when the S&P 500 earned 2.1%, Direxion Daily S&P 500 Bull 3x Shares lost 14.9%. In short, it’s best to leave these so-called winners to professionals—and gamblers.
*Assumes reinvestment of all dividends and capital gains; three and five year returns are annualized. # Exchange-traded note. Expense ratio is the percentage of assets claimed annually for operating a fund. Source: Morningstar Inc.
-
Should You Renew Your CD?With rate cuts impacting earnings, we examine if now is a wise time to renew CDs.
-
7 Ways to Plan Now to Save on Medicare IRMAA Surcharges LaterUnderstand the critical two-year lookback period and why aggressive planning before you enroll in Medicare is the most effective way to minimize IRMAA.
-
Law Reversal Looming? Trump Eyes 2026 Gambling Winnings Tax ChangeTax Deductions It's no secret that the IRS is coming after your gambling winnings in 2026. But how long will that last?
-
The 5 Best Actively Managed Fidelity Funds to Buy and Holdmutual funds Sometimes it's best to leave the driving to the pros – and these actively managed Fidelity funds do just that, at low costs to boot.
-
The 12 Best Bear Market ETFs to Buy NowETFs Investors who are fearful about the more uncertainty in the new year can find plenty of protection among these bear market ETFs.
-
Don't Give Up on the Eurozonemutual funds As Europe’s economy (and stock markets) wobble, Janus Henderson European Focus Fund (HFETX) keeps its footing with a focus on large Europe-based multinationals.
-
Vanguard Global ESG Select Stock Profits from ESG Leadersmutual funds Vanguard Global ESG Select Stock (VEIGX) favors firms with high standards for their businesses.
-
Kip ETF 20: What's In, What's Out and WhyKip ETF 20 The broad market has taken a major hit so far in 2022, sparking some tactical changes to Kiplinger's lineup of the best low-cost ETFs.
-
ETFs Are Now Mainstream. Here's Why They're So Appealing.Investing for Income ETFs offer investors broad diversification to their portfolios and at low costs to boot.
-
Do You Have Gun Stocks in Your Funds?ESG Investors looking to make changes amid gun violence can easily divest from gun stocks ... though it's trickier if they own them through funds.
-
How to Choose a Mutual Fundmutual funds Investors wanting to build a portfolio will have no shortage of mutual funds at their disposal. And that's one of the biggest problems in choosing just one or two.
