Top exchange-traded funds (ETFs) offer a cost-effective way for investors to diversify their portfolios across various asset classes. ETFs track a particular index, sector, or commodity and trade on a stock exchange the same way that a regular stock does, providing investors with added flexibility.
Key Takeaways
- Top ETFs offer a cost-effective way for investors to diversify their portfolios across various asset classes.
- ETFs for July with the best 1-month return include BKCH, FEMB, PFFR, UNG, and FXC.
- Blockchain and natural gas ETFs have performed well over the last month due to gains in Bitcoin and energy prices.
- The Invesco CurrencyShares Canadian Dollar Trust has benefited from a surprise decision by the Bank of Canada to lift interest rates.
Below, we look at five top equity, bond, fixed income, commodities, and currency ETFs that have generated the best returns over the last month, excluding inverse and leveraged ETFs, as well as funds with less than $50 million in assets under management (AUM). All data below is as of June 28.
Equity ETF with the Best 1-Month Return: Global X Blockchain ETF (BKCH)
- Performance 1 Month: 16.58%
- Expense Ratio: 0.5%
- Annual Dividend Yield: 0.65%
- 30-Day Average Daily Volume: 124,007
- Assets Under Management: $79.46 million
- Inception Date: July 12, 2021
- Issuer: Mirae Asset Global Investments Co., Ltd.
BKCH tracks the Solactive Blockchain Index, a benchmark comprising global companies involved in blockchain technologies, such as digital asset mining, digital asset transactions, and blockchain applications. The technology and financial sectors command the lion's share of sector allocation at this ETF with 51.3% and 27.41%, respectively.
The ETF’s top holdings include digital asset mining company Marathon Digital Holdings Inc. (MARA); Coinbase Global Inc. (COIN), the largest cryptocurrency exchange in the U.S.; and Hut 8 Mining Corp. (HUT), a Canadian-based cryptocurrency mining company. Although the fund doesn’t directly hold digital currencies, it has benefited from Bitcoin’s 8% rally over the past month.
Bond ETF with the Best 1-Month Return: First Trust Emerging Markets Local Currency Bond ETF (FEMB)
- Performance One Month: 5.01%
- Expense Ratio: 0.85%
- Annual Dividend Yield: 5.71%
- 30-Day Average Daily Volume: 71,770
- Assets Under Management: $134.41 million
- Inception Date: Nov. 4, 2014
- Issuer: First Trust
FEMB has at least 80% of its net assets invested in bonds, notes, and bills issued or guaranteed by issuers in emerging market countries that are denominated in the local currency. Consequently, currency exchange rates have a significant impact on the fund’s total return.
The fund invests in bonds of any maturity or credit quality, including unrated securities. Emerging market countries that comprise double-digit exposure in the ETF's portfolio include Indonesia at 15.17%, Brazil at 12.47%, Malaysia at 11.08%, and South Africa at 10.89%.
Fixed Income ETF with the Best 1-Month Return: InfraCap REIT Preferred ETF (PFFR)
- Performance 1 Month: 5.85%
- Expense Ratio: 0.45%
- Annual Dividend Yield: 8.57%
- 30-Day Average Daily Volume: 15,421
- Assets Under Management: $59.59 million
- Inception Date: Feb. 7, 2017
- Issuer: Virtus Investment Partners
PFFR tracks the Indxx REIT Preferred Stock Index, a benchmark consisting of U.S.-listed preferred securities issued by real estate investment trusts (REITs). The fund, which rebalances semiannually, only selects securities with a yield of 3% or higher and limits any single issue to a 10% weighting.
Top holdings in the ETF’s portfolio include mortgage manager Annaly Capital Management Inc. (NLY), data center operator Digital Realty Trust Inc. (DLR), and broadband service provider Digital Bridge Communications Corp.
Commodities ETF with the Best 1-Month Return: United States Natural Gas Fund, LP (UNG)
- Performance One Month: 15.96%
- Expense Ratio: 1.11%
- Annual Dividend Yield: N/A
- 30-Day Average Daily Volume: 17,663,625
- Assets Under Management: $1.20 billion
- Inception Date: April 18, 2007
- Issuer: Marygold
UNG provides exposure to front-month natural gas futures designed to track in percentage terms the movements of natural gas prices. If the near-month contract is within two weeks of expiration, the fund will invest in the following month’s contract.
The ETF primarily holds natural gas futures listed on the New York Mercantile Exchange (NYMEX), and may also invest in forwards and swap contracts. UNG has gained momentum in the past month amid data revealing that natural gas inventories have increased more slowly than expected.
Currency ETF with the Best 1-Month Return: Invesco CurrencyShares Canadian Dollar Trust (FXC)
- Performance One Month: 3.66%
- Expense Ratio: 0.4%
- Annual Dividend Yield: 1.06%
- 30-Day Average Daily Volume: 35,424
- Assets Under Management: $92.88 million
- Inception Date: June 21, 2006
- Issuer: Invesco
FXC provides direct exposure to the Canadian dollar (CAD) by holding physical currency in a JPMorgan deposit account, offering investors the ability to hold the Loonie without having to open a foreign exchange account. The fund carries credit risk, as there’s no deposit insurance on its holdings.
The ETF received buying interest after a surprise rate hike in early June from the Bank of Canada to bolster its efforts to tame inflation.
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As of the date this article was written, the author does not own any of the above ETFs.
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