Top exchange-traded funds (ETFs) allow investors to easily purchase and diversify across various asset classes through a single investment product that can be bought and sold on an exchange like a stock. Leading funds typically have a large asset base that provides deep liquidity and minimizes management fees. Investors can also use top ETFs as a research tool to quickly gauge the performance of an index, a sector, or an industry to make more informed investment decisions.
Key Takeaways
- Top ETFs allow investors to easily purchase and diversify across various asset classes through a single investment product.
- For January 2024, ETFs with the best one-month returns include BKCH, GOVZ, ZROZ, BDRY, and FXJ.
- Digital asset-linked ETFs benefited from renewed interest in cryptocurrencies ahead of Bitcoin's halving event in April 2024.
- The Japanese yen currency ETF gained on speculation that the country's central bank will soon move away from its negative interest rate policy that has been in place since 2016.
Below, we outline the top equity, bond, fixed income, commodities, and currency ETFs that generated the highest returns over the last month. We have excluded leveraged and inverse ETFs, as well as funds with less than $50 million in assets under management (AUM). All data is as of Dec. 14, 2023.
Equity ETF with the Best 1-Month Return: Global X Blockchain ETF (BKCH)
- One-month performance: 64.36%
- Expense ratio: 0.5%
- Annual dividend yield: 0.72%
- 30-day average daily volume: 124,007
- AUM: $103.67 million
- Inception date: July 12, 2021
- Issuer: Mirae Asset Global Investments Co., Ltd.
BKCH aims to provide similar returns to the Solactive Blockchain Index, a market-cap weighted benchmark comprising of companies involved in blockchain technologies, such as digital asset transactions, Bitcoin mining, and blockchain hardware.
The fund's top four holdings — Coinbase Global, Inc. (COIN), Marathon Digital Holdings, Inc. (MARA), CleanSpark, Inc. (CLSK), and Riot Platforms, Inc. (RIOT) — represent over half of the portfolio, carrying a cumulative weighting of 53.59%. BKCH benefited over the past month from renewed interest in cryptocurrencies ahead of Bitcoin's halving event in April 2024, which crypto investors typically view as a bullish period for digital assets.
Bond ETF with the Best 1-Month Return: iShares 25+ Year Treasury STRIPS Bond ETF (GOVZ)
- One-month performance: 16.25%
- Expense ratio: 0.1%
- Annual dividend yield: 4.3%
- 30-day average daily volume: 297,926
- AUM: $166.73 million
- Inception date: Sept. 22, 2020
- Issuer: Blackrock
GOVZ tries to mirror the performance of the ICE BofA Long US Treasury Principal STRIPS Index. The benchmark comprises separate trading of registered interest and principal securities (STRIPs), with a remaining maturity of at least 25 years. The fund's top three bonds account for nearly 40% of AUM and mature in August 2049, November 2050, and February 2051. Despite the Federal Reserve recently flagging at least three interest rate cuts this year, bond ETFs remain in the spotlight, with interest rates still sitting at historically high levels around 5%.
Fixed-Income ETF with the Best 1-Month Return: PIMCO 25+ Year Zero Coupon U.S. Treasury Index Exchange-Traded Fund (ZROZ)
- One-month performance: 16.15%
- Expense ratio: 0.15%
- Annual dividend yield: 3.74%
- 30-day average daily volume: 427,193
- AUM: $1.24 billion
- Inception date: Oct. 30, 2009
- Issuer: PIMCO
This ETF also tracks the ICE BofA Long US Treasury Principal STRIPS Index. The fund's top three STRIP allocations mature in February, May, and August 2053 and carry a combined portfolio weighting of 18.17%.ZROZ issues quarterly distributions with proceeds from bonds sold each time it rebalances. Fixed income ETFs continue to see buying interest as investors seek to balance risk with reasonable returns.
Commodities ETF with the Best 1-Month Return: Breakwave Dry Bulk Shipping ETF (BDRY)
- One-month performance: 49.08%
- Expense ratio: 2.85%
- Annual dividend yield: N/A
- 30-day average daily volume: 338,523
- AUM: $56.17 million
- Inception date: March 22, 2018
- Issuer: ETFMG
The fund attempts to deliver similar returns to the Breakwave Dry Freight Futures Index — a benchmark designed to track the performance of freight dry shipping derivatives. It is classified as a commodities ETF because bulk carriers transport basic materials like iron ore and coal. Capesize futures command the fund's top basket weighting at 50%, Panamax contracts at 40%, and Supramax contracts with a 10% weighting. BDRY has recently benefited from increased coal and iron ore exports to China and reduced daily ship crossings in the Panama Canal due to drought.
Currency ETF with the Best 1-Month Return: Invesco CurrencyShares Japanese Yen Trust (FXY)
- One-month performance: 6.14%
- Expense ratio: 0.4%
- Annual dividend yield: N/A
- 30-day average daily volume: 119,204
- AUM: $277.05 million
- Inception date: Feb 12, 2007
- Issuer: Invesco
The ETF tracks the USD/JPY exchange rate, aiming to provide exposure to price fluctuations between the U.S. dollar and Japanese yen by holding the currency in a deposit account. Investors should be aware that the fund doesn't offer deposit insurance, exposing holders to credit risk of its depository, JPMorgan. Nonetheless, it provides a cost-effective solution for those wanting to trade the Japanese yen through a standard brokerage account. FXY has benefited over the last month on speculation that Japan's central bank will soon move away from its negative interest rate policy that has been in place since 2016.
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As of the date this article was written, the author does not own any of the above securities.
