The Five Best ETFs Of 2018

best 2018 etf
There’s an exchange-traded fund (ETF) for just about everything these days—including bitcoin! Virtually every niche sector and currency is tracked by an ETF. So it can be difficult to identify the best ETFs for the upcoming year. There are a number of oil ETFs that have been making strong moves amid the months-long run-up in crude oil—we found three that stand out. We name them in your FREE report, 3 Oil ETFs to Buy as Crude Prices Rise, Plus: What Is an ETF Anyway, Enter your email address to get this report and many others, FREE!

The U.S. housing market is cooking, and single-family homebuilding reached a decade high in 2017. That was great for construction stocks like D.R. Horton (DHI), PulteGroup (PHM) and Toll Brothers (TOL), which are three of this homebuilder-heavy ETF’s five largest holdings. Social media stocks had a great year, highlighted by the turnaround in Twitter (TWTR) and the continued growth of Facebook (FB), both of which are SOCL holdings.

On the downside, Snap, Inc. (SNAP) is the social media ETF’s fifth-largest holding at 5.4% of assets. But the disastrous Snapchat IPO has done little to weigh it down. To explain why this biotech ETF had a good 2017, I’ll defer to something Tyler Laundon, our small-cap biotech stock expert, told me last month about the sector.

“I think (biotech stocks) are looking better and better,” Tyler said. GILD), combined with a big correction, seems to have reset the clock, so to speak. XBI had a great finishing kick, up 5.7% in the last month of the year. It counts Juno Therapeutics (JUNO), AbbVie (ABBV) and United Therapeutics (UTHR) among its top holdings. This is more of a meat-and-potatoes fund.

AMZN), Netflix (NFLX), Google (GOOG), PayPal (PYPL), Twitter and eBay (EBAY). If you’re going to track one ETF in 2018, this is the one that’s probably most worthy of your attention. Those internet stocks that comprise the FDN are the stocks that drive the market these days. If the FDN starts to collapse, so might the market. While it will be difficult for the ETF to match its 2017 return, if it manages even half those gains in 2018, chances are it will be another solid year for the market. Investment analyst and web content editor Chris Preston brings you all the latest from the investing world. Sign up to get updates and breaking news delivered FREE to your inbox. Get unlimited access to our library of complimentary investing reports.

The rubber band is stretched about as tight as it will go. But the key is timing, since the VXX doesn’t do a great job of tracking the VIX over longer periods. If the VIX doesn’t move much, the tracking ETF is still likely to decay in value, similar to an option. Also, it’s not just about the level of the VIX, it also has much to do with the shape of the VIX futures curve. With the VXX, we are expecting short-term volatility to increase and the VIX curve to flatten.

This happens when the underlying VIX increases since it’s the nearest ‘future’ (the spot price). Normally, a long volatility ETF is almost a guaranteed loser, except right before a severe market correction. The timing could be just right for VXX. This article is for entertainment purposes only. Volatility and inverse ETFs/ETNs are not suitable for many investors, especially those with low risk tolerances. Always consult with a financial professional about ways to reduce portfolio risk pertaining for your unique situation. These products have not been fully-battle tested through a bear market and contain many risks. Read the fund’s prospectus for a list of all features and risks.

Generally speaking, small-cap stocks tend to be more volatile than their larger counterparts, but also tend to have more potential for growth. Not only do small-cap stocks tend to be more volatile and have higher long-term return potential than mid-caps or large-caps, but they also tend to be much closer in market cap to one another.

In other words, you don't have companies like Apple or Amazon towering over the rest of the index components. This makes the fund much less top-heavy, meaning that your investment's performance won't be too dependent on a small group of relatively large holdings. The iShares Russell 2000 Growth ETF is appropriate for investors who don't mind a little extra volatility but also don't want too much of their portfolio's performance dependent on a handful of enormous companies.

If the top-heavy nature of a large-cap growth fund isn't appealing to you, yet small-cap growth stocks seem just a bit too volatile for your taste, then a mid-cap growth stock fund could be a good compromise. 10 billion, although this exact definition can vary depending on whom you ask. The Vanguard Mid-Cap Growth ETF tracks the CRSP U.S.

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