Exchange-traded funds (ETFs)offer a way for investors to diversify their portfolio across different asset classes through a single investment product that can be bought and sold on an exchange like a stock. Top ETFs typically have a large asset base and lower operating costs. Investors can also use ETFs to mitigate investment risks and gauge the performance of an index, sector, or industry to make more informed investment decisions.
Key Takeaways
- Leading ETFs offer investors an opportunity to broadly diversify their holdings through a single investment with a low expense ratio and/or higher returns compared to competitors.
- We screened for the equity, bond, fixed income, commodities, and currency ETFs providing the highest 1-month total returns.
- These funds include WGMI, XMPT, RISR, BDRY, and USDU.
- Notably, XMPT and BDRY have expense ratios generally considered to be well above the norm in the ETF space.
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 inassets under management (AUM). All data are current as of Feb. 22, 2024.
Equity ETF with the Best 1-Month Return: Valkyrie Bitcoin Miners ETF (WGMI)
- One-month performance: 41.0%
- Expense ratio: 0.75%
- Annual dividend yield: 0.32%
- 30-day average daily volume: 547,313
- AUM: $106.7 million
- Inception date: Feb. 7, 2022
- Issuer: Valkyrie Investments Inc.
WGMI is an actively managed ETF targeting public companies in the Bitcoin mining industry. Its holdings include firms directly involved in mining tokens, as well as those providing key hardware or services related to cryptocurrency mining. WGMI does not hold cryptocurrencies.
Nearly half of WGMI's assets are allocated to three leaders in the crypto mining space: mining infrastructure company CleanSpark Inc. (CLSK); blockchain and mining firm Marathon Digital Holdings Inc. (MARA), and mining data center and electrical infrastructure name Iris Energy Ltd. (IREN).
Bond ETF with the Best 1-Month Return: VanEck CEF Muni Income ETF (XMPT)
- One-month performance: 3.69%
- Expense ratio: 1.82%
- Annual dividend yield: 3.78%
- 30-day average daily volume: 52,904
- AUM: $237 million
- Inception date: July 12, 2011
- Issuer: VanEck
XMPT provides exposure to the municipal bond market through an atypical mechanism: it invests in closed-end funds that, in turn, invest in these bonds. For investors, the breadth of different bonds and fund managers that XMPT provides is a draw.
On the other hand, while XMPT is not a leveraged fund, some of the CEFs it invests in may use a leveraged strategy, potentially increasing the risk level. Also, due to the complex nature of this fund, it has a much higher expense ratio than many other ETFs.
Fixed-Income ETF with the Best 1-Month Return: FolioBeyond Alternative Income and Interest Rate Hedge ETF (RISR)
- One-month performance: 5.33%
- Expense ratio: 1.13%
- Annual dividend yield: 7.37%
- 30-day average daily volume: 18,896
- AUM: $55.6 million
- Inception date: Sep. 30, 2021
- Issuer: Tidal Investments LLC
This actively managed fund invests primarily in interest-only mortgage-backed securities and U.S. Treasury bonds. Interest-only mortgage-backed securities are a negative-duration security that typically benefits from rising interest rates. RISR seeks to be a hedge for fixed-income investors concerned about the degradation of their investments due to rising rates.
The top holdings of RISR include two sets of Ginnie Mae mortgage-backed securities trusts dated 2052 and 2053, as well as the First American Funds Inc X Government Obligations Fund (FGXXX), which invests in short-term government bonds.
Commodities ETF with the Best 1-Month Return: Breakwave Dry Bulk Shipping ETF (BDRY)
- One-month performance: 17.2%
- Expense ratio: 3.50%
- Annual dividend yield: N/A
- 30-day average daily volume: 179,613
- AUM: $51.2 million
- Inception date: March 22, 2018
- Issuer: ETFMG
The Breakwave Dry Bulk Shipping ETF (BDRY) provides exposure to daily price movements of near-dated dry bulk freight futures. Dry bulk shipping is a significant part of the commodities market, although it does not represent a commodity itself. The fund aims to profit from increases in freight futures beyond what is already priced into the market.
A benefit of BDRY is that it allows investors to gain exposure to the dry bulk futures market without specifically utilizing a futures account. It also provides unleveraged exposure to the industry.
Currency ETF with the Best 1-Month Return: WisdomTree Bloomberg U.S. Dollar Bullish Fund (USDU)
- One-month performance: 1.21%
- Expense ratio: 0.50%
- Annual dividend yield: 6.76%
- 30-day average daily volume: 206,413
- AUM: $171.3 million
- Inception date: Dec. 18, 2013
- Issuer: WisdomTree
The WisdomTree Bloomberg U.S. Dollar Bullish Fund (USDU) aims to exceed the performance of the Bloomberg Dollar Total Return Index. This ETF has a specific focus on tracking the performance of the U.S. dollar relative to a basket of world currencies.
USDU may also be considered as a broad-based diversifier because it typically exhibits strong negative correlations to international equity and bond portfolios.
How We Chose the Best ETFs
We selected the best ETFs across five areas of focus (equities, bonds, fixed-income, commodities, and currencies) utilizing a screener by VettaFi. In each case, we sorted ETFs according to the specified category and ranked them by highest 1-month returns. We then filtered out any ETFs employing a leveraged or inverse strategy as well as any with AUM of under $50 million. Finally, for currencies ETFs, we excluded any funds focused on cryptocurrencies from our screen.
How to Invest in ETFs
Investors can buy and sell shares of ETFs in the same way they make traditional stock trades. Most brokerages provide access to a broad spectrum of ETFs. To begin, simply create and fund a brokerage account, then determine which ETFs you may be interested in purchasing. Follow the steps to initiate a buy through your particular brokerage. In most cases, it's as easy as that.
The Bottom Line
Exchange-traded funds offer investors access to an entire professionally managed portfolio of holdings with a single transaction. Their ability to diversify and simplify a retail investor's investing process is widely regarded. One metric that investors often look to is trailing 1-month performance. The top ETFs for equities, bonds, fixed income, commodities, and currencies for March 2024 based on this metric include WGMI, XMPT, RISR, BDRY, and USDU.
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As of the date this article was written, the author does not own any of the above ETFs.
