5 ETFs That Gained More Than 40% In 2021

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Wall Street has been on a smooth ride this year, with the major bourses near record highs. Solid corporate earnings and an improving economy have been driving the markets higher though inflation fear is weighing on investors’ sentiment.

While there have been winners in many corners of the space, we highlight five ETFs from different segments that have outperformed and gained more than 40% in 2021. These are First Trust ISE-Revere Natural Gas Index Fund (FCG - Free Report), VanEck Vectors Rare Earth/Strategic Metals ETF (REMX - Free Report), North Shore Global Uranium Mining ETF (URNM - Free Report), Invesco S&P SmallCap Value with Momentum ETF (XSVM - Free Report) and SPDR S&P Homebuilders ETF (XHB - Free Report). These funds are expected to continue outperforming, provided the fundamentals remain intact.

Reopening of businesses and economies, the largest vaccination drive, an unprecedented stimulus, and a huge infrastructure package are acting as catalysts for stocks. Overall, the economy is on firmer footing with increased consumer confidence, pick-up in hiring and higher wages. While inflation has surged at the fastest pace in nearly four decades, retail sales remain robust. Further, the U.S. service sector activity gauge hit a record high in November as businesses expedited hiring.

These have resulted in economic recovery from the pandemic lows and powered activities across all sectors and categories, resulting in increased consumer spending. Additionally, solid corporate profits bode well for the stock market rally. However, consistently high inflation, a resurgence in pandemic, taper talks, the potential for high corporate tax rates and signs of a slowdown in China economy have kept the stock market edgy throughout the year.

With just a couple of weeks left in the year, the S&P 500 is up about 23.4%, while the Dow Jones and the Nasdaq have gained 16.1% and 18.2%, respectively.

We have profiled the above-mentioned ETFs in detail below:

First Trust ISE-Revere Natural Gas Index Fund – Up 92.6%

Natural gas is surging on tightening supplies and low inventories, providing upside to the natural gas stocks and ETFs. First Trust ISE-Revere Natural Gas Index Fund offers exposure to U.S. companies involved in the exploration and production of natural gas. It follows the ISE-REVERE Natural Gas Index and holds 40 stocks in its basket.

First Trust ISE-Revere Natural Gas Index Fund has amassed $464.4 million in its asset base while charging 60 bps in annual fees. Volume is good, with 1.5 million shares exchanged per day on average. The product has a Zacks ETF Rank #2 (Buy) with a High risk outlook.

VanEck Vectors Rare Earth/Strategic Metals ETF – Up 73%

Rare earth metals are getting a boost from an accelerating shift to new technologies such as electric vehicles. About 27% of rare metals are used in the production of neomagnets, which are the essential components in electric vehicles (EVs). VanEck Vectors Rare Earth/Strategic Metals ETF offers exposure to companies engaged in producing, refining and recycling rare earth and strategic metals and minerals. It follows the MVIS Global Rare Earth/Strategic Metals Index, holding 20 stocks in its basket.

VanEck Vectors Rare Earth/Strategic Metals ETF has AUM of $1.1 billion and an average daily volume of 193,000 shares. From a country look, Chinese firms dominate the portfolio with a 34.1% share, closely followed by Australia (29.5%) and the United States (14.8%). The product charges 59 bps in annual fees.

North Shore Global Uranium Mining ETF – Up 69.4%

Uranium stocks have been on a tear buoyed by growing social media attention, the restart of nuclear reactors in Japan after 10 years and the growing uranium supply deficit, being accelerated by COVID-19 pandemic related production cuts. North Shore Global Uranium Mining ETF provides exposure to companies involved in the mining, exploration, development and production of uranium, as well as companies that hold physical uranium or other non-mining assets. It follows the North Shore Global Uranium Mining Index and charges investors 85 bps in annual fee.

North Shore Global Uranium Mining ETF holds 35 stocks in its basket and has accumulated $779.2 million in its asset base. It trades in a good volume of 404,000 shares per day on average.

Invesco S&P SmallCap Value with Momentum ETF – Up 49.7%

Small caps have been performing well thanks to an improving economy, cheap valuation and a value tilt amid inflation fears and resurgence in COVID-19 cases. Invesco S&P SmallCap Value with Momentum ETF offers exposure to the companies having the highest "value scores" and "momentum scores" by tracking the S&P 600 High Momentum Value Index. XSVM holds a basket of 117 stocks, each making up for less than 2.5% share. Invesco S&P SmallCap Value with Momentum ETF has a double-digit allocation each in financials, consumer discretionary and industrials.

Invesco S&P SmallCap Value with Momentum ETF has AUM of $498.8 million and an average daily volume of 116,000 shares. XSVM charges 39 bps in annual fees and has a Zacks ETF Rank #3 (Hold).

SPDR S&P Homebuilders ETF – Up 45.6%

The housing market has been on a tear buoyed by lower mortgage rates, skyrocketing demand and limited supplies. The thirst for home buying is rising even in the face of increasing housing prices, thus providing huge profits to homebuilders. SPDR S&P Homebuilders ETF provides exposure to homebuilders with a well-diversified exposure across building products, home furnishing, home improvement retail, home furnishing retail and household appliances. It tracks the S&P Homebuilders Select Industry Index, holding 35 stocks in its basket.

SPDR S&P Homebuilders ETF is the most popular option in the homebuilding space with AUM of $2.4 billion and charges 35 bps in annual fees. The product has a Zacks ETF Rank #2 with a High risk outlook (read: 5 ETFs Trading At New Highs).

Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any ...

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