Most of us only monitor about 5% of the stock market, often thinking that’s the entire universe. That’s why I like to look beyond my comfort zone to see what else is performing well.
This year, AI continues to excel, and cryptocurrencies like Bitcoin and Ether have also been strong performers. However, there have been some surprising winners too. Here are five of them.
#1 iShares MSCI Turkey ETF (TUR)
The Turkey ETF delivered a 26.8% return year-to-date (as of June 4, 2024). Turkey isn’t typically an investing destination that comes to mind first for investors.
This strong performance isn’t because Turkey’s economy is thriving—quite the opposite. The inflation rate is at a staggering 75%! That’s not a typo; it makes America’s inflation look like child’s play.
Turkey’s currency, the Lira, has lost 34% of its value against the USD. Turks have rushed to value-preserving assets, with stocks being one of them. This rush has driven the TUR to become one of the best-performing ETFs this year, even in USD terms.
A similar case occurred in Argentina, where hyperinflation drove the Global X MSCI Argentina ETF (ARGT) up 100% in the past five years.
The lesson here is clear: consider buying the ETF of a country experiencing hyperinflation.
#2 iShares Silver Trust (SLV)
While gold has dominated headlines by breaking record highs, silver, often referred to as the “poor man’s gold,” has outperformed in terms of returns year-to-date. The iShares Gold Trust (IAU) is up 13%, whereas SLV is up 25%.
Despite this impressive performance, silver has yet to reach its previous high.
Several factors could explain the rise in both gold and silver. First, the inflation problem we discussed earlier has driven people to buy value-preserving assets. Second, central banks, particularly China, have been buying gold while reducing their US bond holdings. Third, investors might be trying to anticipate a potential US rate cut, which would depreciate the USD and increase the value of gold and silver in USD terms.
Whatever the reasons, precious metals have performed well this year, and expectations for further increases remain. For speculative purposes, buying and selling IAU or SLV would be easier than acquiring physical metals.
#3 SonicShares Global Shipping ETF (BOAT)
I’ve mentioned that shipping stocks have been rallying this year.
Several factors contribute to this trend. First, the Red Sea remains a danger zone due to the ongoing Middle East conflict, prompting ships to take the longer Cape of Good Hope route instead of the shorter Suez Canal route to avoid the Red Sea. This has led to longer transportation times and higher costs.
Second, the Panama Canal is experiencing severe drought, which has restricted the movement and number of ships that can use the canal.
Third, the U.S. has imposed tariffs on Chinese goods such as EVs, batteries, and steel, causing China to rush to export these goods before the tariffs take effect.
As a result, shipping rates have surged. Instead of buying individual shipping stocks, opting for an ETF can also capture these returns. BOAT has performed well, up 25% this year.
#4 Global X Defense Tech ETF (SHLD)
The Ukraine-Russia war, the Israel-Hamas conflict, and the US-China rivalry have made the world less peaceful as geopolitical tensions rise.
As a result, the demand for defense weapons and equipment is increasing, benefiting defense stocks.
SHLD is a top-performing defense ETF that has risen 22% this year. Below are the top 10 holdings of the ETF, which are mainly US-based defense companies:
#5 AdvisorShares Pure Cannabis ETF (YOLO)
Cannabis, or marijuana, has made significant progress in terms of legalization for medical and recreational use, with more countries and states approving its use.
In the US, 38 states have legalized cannabis for medical use, and 24 states have legalized it for recreational use.
Even more promising is the news at the federal level: President Joe Biden announced that the U.S. government is moving forward with plans to lower the federal classification of cannabis to a less-restrictive category. This change could increase cannabis consumption in the future.
YOLO is a crude but catchy name for a cannabis ETF. It is up 20% year-to-date.
There you go, 5 ETFs that delivered 20% or more this year. Which ones are a surprise to you?
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