We’re finishing up the second full week of the year’s final quarter, and it might be time to take a look back at this year’s big winners in the ETF game. While ETF buyers are typically looking for safer, less volatile plays, that doesn’t mean that there aren’t plenty of options for big returns and the big risks that come with it. Here’s some of the top-performing non-leveraged ETFs tracking equities for 2013.
The pursuit of alternative energy appears to be very much in vogue. Of the ten ETFs with the highest returns so far in 2013, seven are composed of stock in green energy companies. This year’s big winner so far is the Guggenheim Solar Trust ($TAN) with returns in excess of 150 percent. Solar has experienced a massive year, bolstered by rising solar panel prices, improving global installation rates, stabilizing markets as the trade war over panels between China and the United States abates, fueling a widespread perception that the epically bad year in 2012 had left the industry undervalued (the Guggenheim Solar Trust lost over 60 percent from mid-February to mid-November last year).
Now, booming solar stocks are proving to be the rising tide that lifts all alternative energy ETFs. The Market Vectors Solar Energy ETF ($KWT) hasn’t matched Guggenheim’s performance, but it’s still more than doubled its value since the start of the year. In 2013, the First Trust NASDAQ Clean Edge US ETF ($QCLN) is up over 90 percent, the Market Vectors Global Alternative Energy ETF ($GEX) climbed almost 75 percent, the PowerShares WilderHill Clean Energy ETF ($PWB) is up over 65 percent, the cleverly-tickered First Trust Global Wind Energy ETF ($FAN) has jumped over 60 percent, the iShares S&P Global Clean Energy Index Fund ($ICLN) is up almost 55 percent, and the PowerShares Global Clean Energy Portfolio ($PBD) has seen gains just under 55 percent.
All told, the potential energy of going green appears to have been kinetic for most of the year.
It’s been a great year to invest in biotech stocks, or at least the right ones. The notoriously fickle industry, which can swing wildly on the results of a single clinical trial, is up big on the year and has brought the major ETFs tracking it along for the ride. The PowerShares Dynamic Biotech & Genome ETF ($PBE) is up almost 55 percent, the Merrill Lynch Biotech HOLDRS ETF ($BBH) has seen gains over 40 percent, and the iShares NASDAQ Biotechnology Index ($IBB)has gained over 50 percent.
Some have speculated that the recent rebound in equities markets has had investors returning to a risk-on environment and looking for chances at big returns. And biotech’s certainly a good place to look for those.
Social media is clearly among the biggest growth industries out there right now, but it’s also one that continues to stymie Wall Street when it comes to value. However, with Facebook’s (FB) IPO last year, investors finally seem to have the sort of baseline they need to understand the industry. And, they seem to like what they see. Global X Funds Social Media ETF ($SOCL) has gained over 60 percent this year. And that’s with the Twitter ($TWTR) IPO still pending.
Finally, the PowerShares Golden Dragon Halter USX China Portfolio ($PGJ) has jumped over 60 percent in 2013. The ETF tracks the Halter Golden Dragon Index, which tracks companies that derive the majority of their revenues from China. With China’s growth expected to clear 7.5 percent this year, it’s clear that market optimism about the world’s second-largest economy is back.