In this article, we will take a look at the 10 Best Performing ETFs of the Last 5 Years.
Futures markets have switched from expecting a June rate decrease and potentially another before the end of the year, to no cuts until the autumn, with a low possibility of a follow-up before the end of 2025. Reduced confidence about Fed easing came after the January consumer price index report showed a 0.5% monthly rise, raising the annual inflation rate to 3%, a little higher than December and only marginally lower than the 3.1% reading in January 2024. Excluding food and energy, the news was much worse, with a 3.3% rate indicating that core inflation was growing well beyond the central bank’s target.
Furthermore, persistent inflation and President Donald Trump’s strict trade policies have reignited worries of stagflation. Despite repeated warnings over the last 50 years, stagflation has not materialized as a serious danger to investment portfolios. That said, the dreaded scenario has resurfaced as a major risk for investors in recent weeks, as the potential of trade conflicts and punitive tariffs casts a pall over US growth. Jack McIntyre, portfolio manager for Brandywine Global’s fixed income strategies, believes that stagflation has a decent chance of materializing. He said the following:
“Stagflation has definitely re-emerged as a possibility because we have these policies that could hurt consumer demand even while persistent inflation limits the Federal Reserve’s ability to maneuver. It’s not a zero-possibility scenario any more, by a long shot.”
According to a Bank of America poll of global fund managers released on February 18, the number of investors anticipating stagflation, which the bank defines as below-trend GDP and above-trend inflation, during the next year has reached a seven-month high. At the same time, investors remained optimistic about equities, viewing a trade war as a low-probability danger.
The Labor Department’s report on February 20 showed no evidence that Republican President Donald Trump’s administration’s huge layoffs of federal agency workers and severe expenditure cutbacks were having an impact on the economy. Thousands of federal employees, largely on probation, have been sacked in recent days by billionaire Elon Musk’s Department of Government Efficiency, or DOGE, an agency established by Trump. Of course, However, economists who predict a spillover to the private sector believe it is too early to see negative repercussions, although negative effects aren’t completely off the table either. In that regard, Christopher Rupkey, chief economist at FWDBONDS, said:
“The current round of unprecedented belt-tightening and budget cuts and layoffs in Washington have not become a reality yet in terms of showing up in the national statistics. But actions taken in the early days of the new administration may yet bring about a broader economic slowdown and is frankly a risk factor that economists did not see at the start of the year.”
ETF Trends Dominating The Market
Europe played a significant role in driving ETF growth, with total assets under management (AUM) nearing $2.3 trillion by the end of 2024, helped by the fast expansion of online retail savings accounts. Nonetheless, the US was a driving force behind global ETF growth, with AUM topping $10 trillion by the end of 2024. Moreover, a report by EY states that active ETFs are on their way to becoming an increasingly important source of growth. These ETFs are a rising part of European ETF markets, while in the United States they account for 8% of ETF AUM and over half of net inflows in 2024.
In addition, active ETFs accounted for the vast majority of ETF launches in the United States, Canada, and Australia last year. In the first 10 months of 2024, the United States had 482 new active ETFs launched, compared to 144 indexed ETF releases. Regulatory developments in various countries are also promoting active ETFs. The continued entry of new ETF providers and platforms is increasing competition and specialization in ETF markets. This is fantastic news for investors, implying that now is the ideal time for established ETF providers to expand and for newcomers to enter the market.
Photo by Adam Nowakowski on Unsplash
Our Methodology
For this list, we ranked some of the best performing ETFs by their 5-year share price performance as of February 18, 2024, and arranged them in ascending order. In addition, we have included insights into each ETF’s top holdings.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
10. Invesco S&P 500 Momentum ETF (NYSE:SPMO)
5-Year Share Price Performance as of February 18: 130.89%
The Invesco S&P 500 Momentum ETF (NYSE:SPMO) tracks an index of the S&P 500’s 100 companies with stronger recent price performance than their peers. The approach calculates the percentage change in stock prices over the previous year, omitting the most recent month, and then accounts for volatility. The portfolio is then weighted using a mix of company size and momentum score. SPMO has an NAV of $103.07 and an average daily trading volume of 1.32 million shares.
Amazon.com Inc. (NASDAQ:AMZN) is SPMO’s largest holding. The e-commerce behemoth provides consumer items, advertising, subscription services, and cloud computing. The company also provides digital streaming and artificial intelligence technologies.
On February 10, New Street Research upgraded Amazon.com Inc. (NASDAQ:AMZN) shares, with analyst Dan Salmon upping the price target to $280 from $234 while maintaining a Buy rating. Salmon views AWS as a notable driver of Amazon’s future, with growth catalysts including further AWS collaborations, particularly in AI with Trainium 2.
9. Global X US Infrastructure Development ETF (NYSE:PAVE)
5-Year Share Price Performance as of February 18: 138.80%
The Global X U.S. Infrastructure Development ETF (NYSE:PAVE) seeks to invest in firms that stand to gain from a rise in infrastructure development in the United States, such as those producing raw materials, heavy equipment, engineering, and construction. Overall, the fund invests about 75% of its assets in industrial equities and approximately 20% in the materials sector. These are often cyclical sectors that benefit from economic growth and increased investment spending.
CRH plc (NYSE:CRH), is a prominent global manufacturer of building materials solutions and ranks as the largest holding in the Global X U.S. Infrastructure Development ETF (NYSE:PAVE). The company has operations in 28 countries, contributing to road and key utility infrastructure, commercial construction projects, and outdoor lifestyle with its materials and products.
Back in December, Goldman Sachs initiated coverage of CRH plc (NYSE:CRH) with a Neutral rating and a $112 price target. The firm applauded CRH plc’s solid track record of value-driven capital allocation, citing the company’s 18% CAGR in profits per share over the last decade, which was driven by smart acquisitions. On the other hand, the firm cited a number of obstacles, including a forecast slowdown in U.S. non-residential building investment.
8. Invesco Energy Exploration & Production ETF (NYSE:PXE)
5-Year Share Price Performance as of February 18: 136.87%
The Invesco Energy Exploration & Production ETF (NYSE:PXE), which debuted in October 2011, is made up of securities from 30 U.S. corporations involved in the discovery and development of natural resources used to generate energy. These companies are primarily involved in the exploration, extraction, and production of crude oil and natural gas from land-based or offshore wells.
Coterra Energy Inc. (NYSE:CTRA) is the top holding in the Invesco Energy Exploration & Production ETF (NYSE:PXE). Coterra is a Delaware-based diversified energy firm focused on hydrocarbon exploration, with activities in the Permian Basin, Marcellus Shale, and Anadarko Basin.
On February 3, Jefferies raised its price target for Coterra Energy Inc. (NYSE:CTRA) from $26 to $28, while maintaining a Hold rating on the company. The change comes after a period of restrictions after Coterra’s acquisition of assets from Franklin Mountain and Avant. Coterra Energy’s New Mexico asset duration is shorter than its Delaware average, but the new acquisition is seen as a step toward addressing concerns about balancing expansion with inventory levels.
7. SPDR S&P Metals & Mining ETF (NYSE:XME)
5-Year Share Price Performance as of February 18: 141.29%
The SPDR S&P Metals and Mining ETF (NYSE:XME) seeks to mimic the S&P Metals and Mining Select Industry Index’s investment performance. The ETF offers exposure to the S&P TMI’s metals and mining sector, which holds names in the Aluminum, Coal & Consumable Fuels, Metals & Mining, and Precious Metals & Minerals sectors. As of February 18, the ETF has total assets of $1.67 billion and an expense ratio of 0.35%.
The SPDR S&P Metals and Mining ETF (NYSE:XME) holds Newmont Corporation (NYSE:NEM) as its top investment. Newmont, based in Denver, Colorado, is a major player in gold mining, with a diverse portfolio of world-class gold and copper assets throughout North and South America, Australia, and Africa.
The company’s gold output, which totaled 2.1 million gold equivalent ounces in Q3 2024, is the foundation of its operations and a critical element in stock success. In addition, Newmont Corporation (NYSE:NEM) recently launched a series of strategic divestitures to reduce debt, strengthen its portfolio, and sell off non-core assets. To that end, the company sold the Porcupine Complex, Musselwhite, and Éléonore for $425 million, $850 million, and $795 million, respectively.
6. Technology Select Sector SPDR Fund (NYSE:XLK)
5-Year Share Price Performance as of February 18: 143.52%
The Technology Select Sector SPDR ETF (NYSE:XLK) is a passively managed exchange traded fund sponsored by State Street Global Advisors that aims to provide wide exposure to the equity market’s technology section. Furthermore, the fund’s yearly operating expenditures are 0.08%, making it one of the most affordable options on the market.
Apple Inc. (NASDAQ:AAPL) came in as Technology Select Sector SPDR ETF’s (NYSE:XLK) top holding. The tech company focuses on developing, manufacturing, and distributing smartphones, personal computers, tablets, wearables, and accessories.
According to Morgan Stanley, Apple Inc.’s (NASDAQ:AAPL) latest AI program, Apple Intelligence, seems to have slightly boosted iPhone demand in the United States during the December quarter. Looking ahead, Morgan Stanley expects iPhone demand in emerging nations other than China to remain robust, with India leading the way.
Tsai Capital stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter:
“We initiated our investment in Apple Inc. (NASDAQ:AAPL) in 2016 and elevated it to a core holding in 2018, the same year the company introduced its redesigned 13-inch and 15-inch MacBook Pro models. Under Tim Cook’s visionary leadership, Apple has consistently redefined innovation in hardware and software.
The September 2024 launch of the iPhone 16, with its groundbreaking AI capabilities, including enhanced image generation tools, marks another inflection point. We believe this transformative device is the foundation for an AI-driven supercycle and could entice approximately 100 million consumers to upgrade, reinforcing Apple’s leadership in the industry.
Today, Apple’s ecosystem spans over two billion active devices, supported by a rapidly-growing base of subscription services. This strategy has helped to turbocharge customer engagement and spending. In the most recent fiscal year, which ended in September 2024, Apple’s high-margin services division accounted for 39.3% of total gross profits, up from 32.8% just two years ago.
Apple’s financial footing remains exceptional, with approximately $50 billion in net cash and marketable securities. Looking ahead, we expect earnings-per-share growth to outpace revenue growth, driven by margin expansion and continued share buybacks.”
5. Fidelity MSCI Information Technology Index ETF (NYSE:FTEC)
5-Year Share Price Performance as of February 18: 144.55%
The Fidelity MSCI Information Technology Index ETF (NYSE:FTEC) invests in public U.S. stock markets, with an emphasis on information technology businesses. The fund holds a mixed bag of both growth and value stocks with varying market capitalizations and aims to mirror the performance of the MSCI USA IMI Information Technology 25/50 Index using a representative sample method. FTEC has an expense ratio of 0.084% on its $13.35 billion in net assets.
Broadcom Inc. (NASDAQ:AVGO) is among the top positions in the Fidelity MSCI Information Technology Index ETF. Broadcom operates as a semiconductor company that develops a wide range of semiconductor and infrastructure software technologies.
Broadcom Inc. (NASDAQ:AVGO) reported revenues of $14.05 billion in the fourth quarter of 2024, a 51% increase year-over-year. AI sales increased 220% from the previous year to $12.2 billion, while semiconductor revenue reached a new high of $30.1 billion. The company’s cutting-edge AI XPUs and Ethernet networking solutions were identified as major drivers throughout the quarter. As of February 18, AVGO’s quarterly dividend was $0.59 per share, yielding 1.05%.
4. ProShares UltraPro S&P500 (NYSE:UPRO)
5-Year Share Price Performance as of February 18: 156.40%
ProShares UltraPro S&P500 (NYSE:UPRO), a measure of large-cap U.S. stock market performance, invests in financial options that ProShare Advisors believes would provide daily returns consistent with the Daily Target. The fund holds a net expense ratio of 0.91%, as well as a total trading volume of 2.7 million.
Microsoft Corporation (NASDAQ:MSFT) is among the top three stocks in the fund’s portfolio. The company provides a wide range of software, services, and gadgets, including Windows OS. Azure, Microsoft’s cloud computing platform, is also a major player in the cloud services market.
On January 30, RBC Capital Markets retained its Outperform rating for Microsoft shares, with a $500 price target. The company recently revealed its software industry projection for 2025, selecting Microsoft Corporation (NASDAQ:MSFT) for its diverse market exposure and position to benefit from generative AI.
3. First Trust Natural Gas ETF (NYSE:FCG)
5-Year Share Price Performance as of February 18: 176.71%
The First Trust Natural Gas ETF (NYSE:FCG) offers tailored exposure to the natural gas industry. It tracks firms involved in natural gas production, transportation, and distribution, as well as the ISE-Revere Natural Gas Index. FCG provides investors with a unique investment opportunity to participate in the growth and development of the natural gas industry.
EOG Resources, Inc. (NYSE:EOG) is one of FCG’s top holdings. A Texas-based company, EOG Resources is involved in the exploration, development, production, and marketing of hydrocarbons, such as crude oil, natural gas, and natural gas liquids.
On February 12, RBC Capital Markets raised EOG Resources Inc.’s (NYSE:EOG) stock rating from Sector Perform to Outperform. Along with the rating adjustment, EOG Resources’ price target was raised from $150 to $155. RBC Capital Markets upgraded the company based on its continuous solid operational performance and exposure to rising natural gas prices, which are projected to benefit the energy producer. EOG Resources is also anticipated to benefit from its engagement in the Dorado play.
2. ProShares UltraPro QQQ (NASDAQ:TQQQ)
5-Year Share Price Performance as of February 18: 234.28%
ProShares recently celebrated the 15th anniversary of the ProShares UltraPro QQQ (NASDAQ:TQQQ) fund, which has become one of the world’s most leveraged ETFs since its inception back in early 2010. The fund’s performance coincides with an era of tremendous technology progress, offering investors the opportunity for 3x exposure to the tech-heavy Nasdaq-100 or lower capital investment requirements. TQQQ has been recognized as one of the best-performing ETFs in the United States since its debut, managing more than $25 billion in assets.
NVIDIA Corporation (NASDAQ:NVDA), a global leader in the creation and selling of Graphics Processing Units (GPUs), is one of the TQQQ fund’s top stock holdings. Although the company had a wild reaction to competition from DeepSeek AI, investors seem to have processed the news well and are confident NVIDIA’s development in the GPU area is not expected to be challenged anytime soon.
BofA expects NVIDIA Corporation (NASDAQ:NVDA) to slightly outperform forecasts when it publishes its fiscal fourth-quarter results on February 26. That said, the bank’s analysts cautioned that near-term hurdles may weigh on the company’s first-quarter expectations. While NVIDIA’s stock may see post-earnings volatility, the firm expects positive momentum to return as investors look ahead to its upcoming product pipeline. Furthermore, BofA maintains NVIDIA as its top sector selection, highlighting the company’s distinct position as a “computing platform” rather than merely a chipmaker.
Manole Capital Management stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q3 2024 investor letter:
“As of this publication, Nvidia is up roughly 150% year-to-date. NVIDIA Corporation (NASDAQ:NVDA) was the largest gainer in the S&P 500 last year and has more than tripled in value over the last year. It hit an eye-opening market capitalization of $3 trillion in June, less than four months after it eclipsed the $2 trillion mark. Enthusiasm for everything AI-related, especially for the primary chip maker whose products are essential to powering AI technology, continues to fuel the market. Last quarter, and for the fifth consecutive quarter, Nvidia reported sales and profits that blew past Wall Street expectations. The stock rose +37% in the second quarter alone.”
1. ProShares Ultra Semiconductors (NYSE:USD)
5-Year Share Price Performance as of February 18: 702.16%
ProShares Ultra Semiconductors provides two times the daily performance of the Dow Jones U.S. Semiconductor Index. Rather than simply investing in semiconductor companies, the fund significantly owns swaps. These are derivatives exchanged with another party that synthetically offers USD with leveraged exposure to the Dow Jones U.S. Semiconductors SM Index. That said, swaps can often be expensive, as seen by USD’s high 0.95% expense ratio. The fund manages $1.1 billion in net assets and trades at an average daily volume of 570,314 shares.
QUALCOMM Incorporated (NASDAQ:QCOM), one of the fund’s top holdings, is a major American telecom equipment and semiconductor corporation headquartered in California. The firm provides chips to big corporations such as Samsung, Huawei, and BMW in a variety of high-growth areas, including smartphones and self-driving cars.
QUALCOMM Incorporated (NASDAQ:QCOM) posted better-than-expected fiscal first-quarter earnings for 2025, with sales up 18% from $9.92 billion the year before. The company forecasts revenues between $10.2 billion and $11 billion in the March quarter, which is higher than the midpoint estimate of $10.34 billion. It also expects adjusted profits to come in at $2.70 to $2.90 per share, exceeding Wall Street’s forecast of $2.69 per share.
While we acknowledge the potential of QCOM as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than QCOM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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