2024 was an unbelievable 12 months for exchange-traded funds (ETFs) as an funding car, with traders funneling a record-breaking $1.1 trillion in new property into these funds. With new ETFs launching on a regular basis, traders now have greater than 12,000 totally 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 courses 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 troublesome—a few of 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 decisions for buy-and-hold traders.
Three of the extra conventional ETFs that nonetheless stood out for his or her sturdy efficiency throughout 2024 embrace the Invesco S&P 500 Momentum ETF NYSEARCA: SPMO, the American Century Centered Dynamic Development ETF NYSEARCA: FDG, and the Hartford Massive Cap Development 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 Right this moment
As of 01/17/2025 04:10 PM Japanese
- 52-Week Vary
- $66.52
▼
$98.79
- Dividend Yield
- 0.96%
- Property 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 traders with particular person positions in a few of the hottest U.S. large-caps ought to double-check SPMO’s basket to ensure they don’t seem to be by accident skewing their distribution by doubling up on a few of these corporations. Additional, SPMO is just not 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 Centered Dynamic Development ETF: Sturdy Efficiency and Non-Clear
American CenturyFocused Dynamic Development ETF Right this moment
As of 01/17/2025 04:10 PM Japanese
- 52-Week Vary
- $71.10
▼
$109.95
- Property Beneath Administration
- $7.01 million
FDG returned 47.3% within the 12 months resulting in January 15, 2025, a powerful advice for the fund’s considerably uncommon strategy. This ETF is a so-called energetic non-transparent fund, which means that the managers of the fund don’t essentially should disclose their particular holdings as recurrently as for conventional ETFs. As an actively managed fund, it comes with a better expense ratio than a lot of its passively managed friends—traders will spend 0.45% to carry FDG.
FDG’s mandate is simple: concentrate on mid- and large-cap U.S. corporations with sturdy progress and profitability potential. As a comparatively current fund (it launched in 2020 after the SEC authorized energetic non-transparent funds the prior 12 months), it has a restricted efficiency historical past. Nevertheless, the fund’s efficiency in 2024 could also be sufficient to entice some traders within the new 12 months.
Hartford Massive Cap Development ETF: Slender Basket of Prime U.S. Names
Hartford Massive Cap Development ETF Right this moment
- Property Beneath Administration
- $127.00 million
HFGO is one other actively managed fund that grew to become absolutely 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 accessible and up to date recurrently, the precise methodology behind the part of the constituents of the portfolio is much less readily obvious to outdoors traders.
With simply 42 holdings as of January 15, 2025, HFGO’s basket is extremely concentrated. Its two largest positions—Apple and NVIDIA, respectively—take up a mixed 25% or so of invested property. This makes HFGO a fantastic possibility for traders in search of broad publicity to lots of the greatest 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.
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