Hello! This week’s ETF Wrap looks at top performers in the first half of 2023, as well as flows, as stocks rally and crypto-related funds jump so far this year.
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Cryptocurrency-related exchange-traded funds are skyrocketing in the first half of 2023 as bitcoin rebounds from last year’s selloff, outperforming other U.S.-listed ETFs so far this year, according to CFRA Research.
The top 15 ETFs in terms of performance this year have exposure to crypto or blockchain, said Aniket Ullal, head of ETF data and analytics at CFRA, in a phone interview. That’s based on a screening of nonleveraged ETFs, he said, with the Valkyrie Bitcoin Miners ETF
topping the list with a year-to-date return of nearly 189% percent through June 27.
Crypto funds got a recent boost from this month’s application by BlackRock, the world’s largest asset manager, for a spot bitcoin ETF, according to Ullal. “It’s created more optimism about a spot bitcoin ETF being approved,” potentially, by the Securities and Exchange Commission, he said.
|Top 15 ETFs so far this year||%Performance|
Valkyrie Bitcoin Miners ETF
VanEck Digital Transformation ETF
Global X Blockchain ETF
Bitwise Crypto Industry Innovators ETF
Invesco Alerian Galaxy Crypto Economy ETF
Global X Blockchain & Bitcoin Strategy ETF
iShares Blockchain and Tech ETF
Simplify Bitcoin Strategy PLUS Income ETF
Hashdex Bitcoin Futures ETF
ProShares Bitcoin Strategy ETF
VanEck Bitcoin Strategy ETF
Fidelity Crypto Industry and Digital Payments ETF
Valkyrie Bitcoin Strategy ETF
First Trust SkyBridge Crypto Industry & Digital Economy ETF
Grayscale Future of Finance ETF
|Source: CFRA RESEARCH, DATA AS OF JUNE 27, 2023|
The largest bitcoin exchange-traded fund is the ProShares Bitcoin Strategy ETF
said Ullal. The ETF, which primarily invests in bitcoin futures contracts, has around $1 billion of assets under management, according to FactSet data. While the fund does not invest directly in the cryptocurrency, it has closely tracked spot-bitcoin performance, ProShares says in the ETF’s fact sheet at the end of March.
Bitcoin prices plunged last year in a tumultuous 2022 for markets, with the cryptocurrency sinking as inflation soared and stocks and bonds sold off. Markets sank as the Federal Reserve battled the high cost of living with a rapid pace of interest-rate hikes that has slowed this year.
On Thursday afternoon, bitcoin
was trading around $30,562, according to CoinDesk data. That’s about double its trading level in late 2022, but still well below its peak approaching $70,000 in 2021.
In mid-June, BlackRock applied for a spot bitcoin ETF named iShares Bitcoin Trust, according to a document filed with the SEC. Bitcoin prices were then trading around $25,000. On Thursday, Fidelity refiled paperwork for a spot bitcoin ETF.
Meanwhile, a mix of stock and bond ETFs have seen the biggest inflows in the first half of 2023.
The Vanguard S&P 500 ETF
has attracted the most capital this year through June 27 with flows of around $13.8 billion, followed by the iShares 20+ Year Treasury Bond ETF
at around $11.3 billion and iShares MSCI USA Quality Factor ETF
at $9.9 billion, according to Ullal. The JPMorgan Equity Premium Income ETF
garnered the next largest inflows over the same period at $9.7 billion, while the iShares Core U.S. Aggregate Bond ETF
ranked fifth by attracting $8.3 billion, he said.
Among actively managed equity funds, the JPMorgan Equity Premium Income ETF, which invests in low-volatility stocks, while using a covered call options strategy to generate income, has raked in the most inflows this year through June 27, said Ullal.
That’s despite the fund lagging behind the S&P 500 over the same period with a total return of 4.8%, according to FactSet data.
The strategy used by the JPMorgan Equity Premium Income ETF is designed to fare relatively well in a “horizontal” stock market, not to beat it when equities are rising quickly, he said. Shares of the SPDR S&P 500 ETF Trust
have soared a bit more than 14% this year through June 27, for a total return of 14.9%.
Some people may have been “caught off guard” by the U.S. stock market’s rally during the first half of this year, said Ullal.
As usual, here’s your look at the top- and bottom-performing ETFs over the past week through Wednesday, according to FactSet data.
ARK Next Generation Internet ETF
ARK Fintech Innovation ETF
U.S. Global Jets ETF
iShares US Transportation ETF
ARK Innovation ETF
|Source: FactSet data through Wednesday, June 28. Start date June 22. Excludes ETNs and leveraged products. Includes NYSE, Nasdaq and Cboe traded ETFs of $500 million or greater|
…and the bad
KraneShares Global Carbon Strategy ETF
FirstTrust NYSE Arca Biotechnology Index Fund
Xtrackers MSCI EAFE Hedged Equity ETF
Invesco DB Agriculture Fund
First Trust Global Tactical Commodity Strategy Fund
|Source: FactSet data|
- Schwab Asset Management announced on June 26 the launch of the Schwab High Yield Bond ETF (SCYB), which is expected to begin trading on or about July 11.
Fidelity plans to convert six actively managed “enhanced index” mutual funds into equity ETFs, according to June 28 filings with the Securities and Exchange Commission. The Fidelity International Enhanced Index Fund
will become Fidelity Enhanced International ETF; the Fidelity Large Cap Core Enhanced Index Fund
will become Fidelity Enhanced Large Cap Core ETF; Fidelity Large Cap Growth Enhanced Index Fund
will become Fidelity Enhanced Large Cap Growth ETF; Fidelity Large Cap Value Enhanced Index Fund
will become Fidelity Enhanced Large Cap Value ETF; Fidelity Mid Cap Enhanced Index Fund
will become Fidelity Enhanced Mid Cap ETF; Fidelity Small Cap Enhanced Index Fund
will become Fidelity Enhanced Small Cap ETF.
Volatility Shares said June 27 that it launched the 2x Bitcoin Strategy ETF
which provides leveraged bitcoin-linked exposure. The fund tracks the S&P CME Bitcoin Futures Daily Roll Index before fees and expenses, according to the announcement.
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