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 one-month total returns for June 2024.
- These funds include QCLN, GOVZ, DEED, UNG, FXB.
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 May 25, 2024.
Equity ETF with the Best 1-Month Return: First Trust NASDAQ Clean Edge Green Energy Index Fund (QCLN)
- One-month performance: 20.9%
- Expense ratio: 0.59%
- Annual dividend yield: 0.74%
- 30-day average daily volume: 170,935
- AUM: $775 million
- Inception date: Feb. 8, 2007
- Issuer: First Trust
QCLN aims to replicate the performance of a U.S. index of clean energy companies involved in technologies like solar, wind, batteries, fuel cells, and electric vehicles. The ETF primarily invests in the First Trust NASDAQ Clean Edge Green Energy Index Fund. The ETF provides exposure to the NASDAQ Clean Edge Green Energy Index, which tracks the performance of a set of clean energy companies. As of March 28, 2024, the index was heavily weighted toward technology and energy companies, primarily in the solar and semiconductor sectors.
Bond ETF with the Best 1-Month Return: SPDR iShares 25+ Year Treasury STRIPS Bond ETF (GOVZ)
- One-month performance: 4.6%
- Expense ratio: 0.10%
- Annual dividend yield: 4.3%
- 30-day average daily volume: 254,709
- AUM: $230.8 million
- Inception date: Sept. 22, 2020
- Issuer: BlackRock
GOVZprovides exposure to U.S. Treasury STRIPS with long-term maturities of at least 25 years. STRIPS are bonds that have been separated into their individual interest and principal components,
which are then sold as separate securities. This allows investors to buy just the interest payments or the principal repayment separately, making it easier to manage and customize their investment strategies. GOVZ’s investment objective is to track the performance of an index composed of these long-term principal STRIPS, ensuring stable and predictable returns.
Fixed Income ETF with the Best 1-Month Return: First Trust TCW Securitized Plus ETF (DEED)
- One-month performance: 2.53%
- Expense ratio: 0.76%
- Annual dividend yield: 6%
- 30-day average daily volume: 36,883
- AUM: $64.4 million
- Inception date: April 29, 2020
- Issuer: First Trust
The First Trust TCW Securitized Plus ETF aims to maximize long-term total returns by investing at least 80% of its assets in securitized debt securities, such as asset-backed securities and mortgage-backed securities (MBS). The fund aims to outperform the Bloomberg Barclays U.S. Mortgage-Backed Securities Index and focus on undervalued securities with a superior risk/reward profile. As of April 30, 2024, over 67% of the assets are agency-backed MBS, which are comprised of mortgages issued or guaranteed by government agencies Fannie Mae, Freddie Mac, or Ginnie Mae.
Commodities ETF with the Best 1-Month Return: United States Natural Gas Fund LP (UNG)
- One-month performance: 23.2%
- Expense ratio: 1.06%
- Annual dividend yield: N/A
- 30-day average daily volume: 8,334,074
- AUM: $874 million
- Inception date: April 18, 2007
- Issuer: Marygold
UNG attempts to track natural gas prices through investments in natural gas futures contracts, and at times, forwards and swap contracts. UNG gives investors exposure to natural gas without the need for a commodities futures account. The ETF returned a strong 23% for the month of May,
Currency ETF with the Best 1-Month Return: Invesco Currency Shares British Pound Sterling Trust (FXB)
- One-month performance: 2.59%
- Expense ratio: 0.4%
- Annual dividend yield: 3.94%
- 30-day average daily volume: 6,317
- AUM: $61.2 million
- Inception date: June 21, 2006
- Issuer: Invesco
FXB attempts to track the movement of the British pound sterling. The British pound rallied in May 2024 due to stronger-than-expected economic data and a higher-than-anticipated inflation rate. U.K. inflation exceeded market expectations, falling to 2.3% year-over-year, which led to an increase in the pound's value as it suggested that the economy was holding up better than expected. Additionally, robust wage growth and positive economic indicators have bolstered confidence in the U.K.'s economic resilience.
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 one-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 one-month performance. The top ETFs for equities, bonds, fixed income, commodities, and currencies for June 2024 based on this metric include QCLN, GOVZ, DEED, UNG, and FXB.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes only. Read ourwarranty and liability disclaimerfor more info.
As of the date this article was written, the author does not own any of the above ETFs.
