2024 was an unimaginable 12 months for exchange-traded funds (ETFs) as an funding automobile, with buyers funneling a record-breaking $1.1 trillion in new belongings into these funds. With new ETFs launching on a regular basis, buyers now have greater than 12,000 completely different choices from which to decide on.
The power of the efficiency of the S&P 500 was undoubtedly useful in drawing investor consideration to ETFs, however the wide range of methods, approaches, asset lessons represented, and different elements current throughout the area have mixed to make ETFs ubiquitous. That mentioned, selecting the “finest” ETFs of 2024 to function a beginning place for contemplating new investments in 2025 is tough—among the top-performing funds make use of leverage and day by day resets in an effort to amplify momentary returns of explicit indices, making them poor selections for buy-and-hold buyers.
Three of the extra conventional ETFs that nonetheless stood out for his or her sturdy efficiency throughout 2024 embody the Invesco S&P 500 Momentum ETF NYSEARCA: SPMO, the American Century Targeted Dynamic Progress ETF NYSEARCA: FDG, and the Hartford Massive Cap Progress ETF BATS: HFGO. Additional, all three of those funds might proceed this momentum into the brand new 12 months.
Invesco S&P 500 Momentum ETF: Better of the Greatest Massive-Caps
Invesco S&P 500 Momentum ETF TodaySPMOInvesco S&P 500 Momentum ETF$98.65 +1.08 (+1.11%) As of 01/17/2025 04:10 PM Eastern52-Week Vary$66.52▼$98.79Dividend Yield0.96percentAssets Beneath Administration$4.21 billion
SPMO loved a one-year return as of January 15, 2025, of 46.8%, handily beating the broader market. This issue ETF adopts a commonsense strategy: discover large-cap shares which have a current historical past of sturdy worth efficiency and focus in on them narrowly. The fund goals to determine 100 S&P shares which have outperformed their friends within the final 12 months, excluding the newest month, after adjusting for volatility.
SPMO’s strategy favors mega-cap stars like NVIDIA Corp. NASDAQ: NVDA and Amazon.com Inc. NASDAQ: AMZN, so buyers with particular person positions in among the hottest U.S. large-caps ought to double-check SPMO’s basket to ensure they are not by chance skewing their distribution by doubling up on a few of these companies. Additional, SPMO will not be a very broadly diversified momentum fund—although that is not the purpose—however for an expense ratio of 0.13% this ETF makes a compelling case for inclusion in lots of portfolios this 12 months.
American Century Targeted Dynamic Progress ETF: Sturdy Efficiency and Non-Clear
American CenturyFocused Dynamic Progress ETF TodayFDGAmerican CenturyFocused Dynamic Progress ETF$106.11 +1.61 (+1.54%) As of 01/17/2025 04:10 PM Eastern52-Week Vary$71.10▼$109.95Assets Beneath Administration$7.01 million
FDG returned 47.3% within the 12 months resulting in January 15, 2025, a powerful suggestion for the fund’s considerably uncommon strategy. This ETF is a so-called lively non-transparent fund, that means that the managers of the fund don’t essentially must disclose their particular holdings as usually as for conventional ETFs. As an actively managed fund, it comes with the next expense ratio than a lot of its passively managed friends—buyers will spend 0.45% to carry FDG.
FDG’s mandate is simple: deal with mid- and large-cap U.S. companies with sturdy progress and profitability potential. As a comparatively current fund (it launched in 2020 after the SEC authorized lively non-transparent funds the prior 12 months), it has a restricted efficiency historical past. Nonetheless, the fund’s efficiency in 2024 could also be sufficient to entice some buyers within the new 12 months.
Hartford Massive Cap Progress ETF: Slender Basket of Prime U.S. Names
Hartford Massive Cap Progress ETF TodayHFGOHartford Massive Cap Progress ETF$24.10 +0.71 (+3.04%) As of 01/17/2025 03:49 PM Japanese This can be a truthful market worth worth supplied by Polygon.io. Study extra.Belongings Beneath Administration$127.00 million
HFGO is one other actively managed fund that turned totally clear in July 2024. This ETF additionally has a easy tenet, because it seeks progress shares with early indicators of accelerating fundamentals. In apply, this implies a portfolio closely weighted towards info expertise names and centered extra broadly on U.S. large-caps. Whereas the holdings info is publicly obtainable and up to date usually, the precise methodology behind the part of the constituents of the portfolio is much less readily obvious to outdoors buyers.
With simply 42 holdings as of January 15, 2025, HFGO’s basket is very concentrated. Its two largest positions—Apple and NVIDIA, respectively—take up a mixed 25% or so of invested belongings. This makes HFGO an awesome choice for buyers on the lookout for broad publicity to most of the largest names in U.S. shares.
As an actively managed fund, HFGO’s expense ratio is 0.59%. That is larger than many rivals, however the fund’s efficiency historical past could warrant the bigger charge. HFGO has returned 41.7% within the final 12 months, as of January 15, 2025. Earlier than you think about Invesco S&P 500 Momentum ETF, you will need to hear this.Whereas Invesco S&P 500 Momentum ETF at present has a “Maintain” ranking amongst analysts, top-rated analysts consider these 5 shares are higher buys.View The 5 Shares Right here Trying to keep away from the effort of mudslinging, volatility, and uncertainty? You’d must be out of the market, which isn’t viable. So the place ought to buyers put their cash? Discover out with this report.Get This Free Report
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