In this piece, we will take a look at the ten best performing actively managed ETFs in 2023. If you want to skip our introduction to ETFs and the stock market in general, then take a look at the 5 Best Performing Actively Managed ETFs in 2023.
The stock market is full of all kinds of investment vehicles that can be used by professional and retail investors with different risk appetites. The most commonly discussed investment security is a stock, which is simply a representation of a company’s equity and allows traders to make profits through share price appreciation or others to make money via other avenues such as dividends.
However, investing in stocks is not for everyone. While buying the shares of well established companies such as Apple Inc. (NASDAQ:AAPL) and Microsoft Corporation (NASDAQ:MSFT) is unlikely to lead to significant losses, when the investment horizon is broadened, then the process becomes more complex. Any coverage about stocks, such as this one, comes with a disclaimer that all investment decisions should be made after consulting a qualified professional and to good effect. Investing in stocks typically requires understanding the fundamental nature of a company’s business as well as being cognizant of economic realities that can affect stock indexes as a whole.
To avoid the high research required for stock investments, one popular investment vehicle is an exchange traded fund (ETF). An ETF is a collection of stocks that is typically compiled by professional financial services providers such as BlackRock, Inc. (NYSE:BLK). These are generally based either on industry sectors such as healthcare, energy, or technology, or stock and firm characteristics such as value stocks or growth stocks.
Within the ETF, there are two broad categories. These are actively managed ETFs and passively managed ETFs. As you might have guessed, actively managed ETFs have a portfolio manager in charge of regularly updating the fund. ETFs typically track a benchmark index, such as the S&P 500, and in an actively managed ETF, the portfolio manager is not constrained by the rules of the underlying index. For instance, the S&P 500 requires that any constituent firm must be profitable, and a fund manager can simply choose to ignore this if they feel that the restrictions are too tight and ignore other great stocks that can offer investors a return.
ETFs are so popular that even one of the greatest investors of our time, Warren Buffett of Berkshire Hathaway, holds one in his investment portfolio. Insider Monkey scanned Berkshire’s investments for the second quarter of 2023 and discovered that Mr. Buffett had invested $17.4 million in the SPDR S&P 500 ETF Trust (NYSE:SPY). The SPDR S&P 500 ETF Trust (NYSE:SPY) is one of the biggest ETFs in the world in terms of its net assets. Currently, these sit at $393 billion, and for those out of the loop, an ETFs net assets are the amount left over for investors after all its liabilities are subtracted from the assets. The ETF is part of the SPDR State Street Global Advisors fund family, and as the title suggests, it tracks the S&P 500 stock index managed by S&P Global Inc. (NYSE:SPGI). Since its inception in 1993, the ETF has gained 902% in share price appreciation, which is in line with the corresponding value of 910% for the benchmark index over the same time period. However, the ETF is passively managed, so there’s little benefit in investing in it apart from the ability to receive dividends (which is undoubtedly why Mr. Buffet has invested millions of dollars in it).
Shifting gears to focus on the current stock market environment, these days, the Federal Reserve is once again back under the spotlight. November has seen several stock indexes such as the NASDAQ and the S&P post multi-day returns as investors started to speculate that the Federal Reserve might be finished with its current interest rate hiking cycle. At the heart of the current stock market chatter is the Treasury market. Treasuries, or bonds, are debt securities and their prices drop if interest rates are rising. This makes their yield shoot up, and it also raises the costs of raising capital.
Fed Chair Jerome Powell’s comments that he and his team are aware of high yields and their effect on borrowing costs along with the broader economic health were what spurred the latest stock market rally. At the same time, his later comments that further hikes might be warranted to fully control the beast that is inflation also took the air out of the rallies. Volatility in the Treasury market is measured by the ICE BofAML MOVE Index (^MOVE) index, and this index is currently seven points higher than its reading at the end of June 2023 and a little over ten points higher than a recent low of 96.61 in September.
Combining all these factors, it’s clear that the stock market is in no mood to be boring at the tail end of 2023. Money doesn’t grow on trees, and the market is adamant that investors earn every dime of their winnings instead of just cruising along and watching their investments grow. This might also be the right time to see which stocks and ETFs have done well in 2023’s turbulent environment. Therefore, we decided to dig out the best performing actively managed exchange traded funds in 2023, and the top performers are GraniteShares 1.5x Long META Daily ETF (NASDAQ:FBL), GraniteShares 1.5x Long NVDA Daily ETF (NASDAQ:NVDL), and Valkyrie Bitcoin and Ether Strategy ETF (NASDAQ:BTF).
Photo by Ruben Sukatendel on Unsplash
To compile our list of 2023’s best performing actively managed ETFs, we first made a list of all such ETFs and ranked them by their market capitalization. Then, their year to date gains were calculated, and the top performing actively managed ETFs in 2023 are as follows.
Best Performing Actively Managed ETFs in 2023
10. Amplify Transformational Data Sharing ETF (NYSE:BLOK)
Year to date returns: 46.03%
Amplify Transformational Data Sharing ETF (NYSE:BLOK) is part of the Amplify ETFs fund family. It was set up in 2018 and has a net asset value of $427 million. It is an equity ETF, and the fund limits itself to investing primarily in companies that deal with blockchain technology. Stocks account for more than 90% of Amplify Transformational Data Sharing ETF (NYSE:BLOK)’s holdings, and its top three stock picks are MicroStrategy Incorporated (NASDAQ:MSTR), Coinbase Global, Inc. (NASDAQ:COIN), and Galaxy Digital Holdings Ltd. (TSE:GLXY.TO). Along with GraniteShares 1.5x Long NVDA Daily ETF (NASDAQ:NVDL), GraniteShares 1.5x Long META Daily ETF (NASDAQ:FBL), and Valkyrie Bitcoin and Ether Strategy ETF (NASDAQ:BTF), it is one of the best performing actively managed ETFs in 2023.
9. ARK Next Generation Internet ETF (NYSE:ARKW)
Year to date returns: 52.79%
ARK Next Generation Internet ETF (NYSE:ARKW) is an exchange traded fund managed by Cathie Wood’s Ark Invest. The fund was set up in 2014 and it has $1.14 billion in net assets. The ARK Next Generation Internet ETF (NYSE:ARKW) focuses on firms that are either headquartered in the U.S. or those that trade on U.S. stock exchanges. It limits its attention to investing in firms that rely on the Internet to deliver their products and services. The sectors that this ETF is primarily involved with include cloud computing, artificial intelligence, big data, and blockchain technologies.
8. GraniteShares 1.75x Long AAPL Daily ETF (NASDAQ:AAPB)
Year to date returns: 70.03%
GraniteShares 1.75x Long AAPL Daily ETF (NASDAQ:AAPB) is one of the smaller ETFs on our list in terms of net assets since its net assets are currently worth $3.83 million. It is also a relatively young ETF since it was set up a little over a year back in 2022. As the title suggests, the GraniteShares 1.75x Long AAPL Daily ETF (NASDAQ:AAPB) focuses on Apple Inc. (NASDAQ:AAPL)’s stock and it seeks to amplify the appreciation in Apple’s share price. Apple’s shares are up 40% year to date, making it unsurprising that GraniteShares 1.75x Long AAPL Daily ETF (NASDAQ:AAPB) has posted 70% in year to date returns.
7. GraniteShares 1.25x Long Tsla Daily ETF (NASDAQ:TSL)
Year to date returns: 80.34%
GraniteShares 1.25x Long Tsla Daily ETF (NASDAQ:TSL) is an exchange traded fund similar to the GraniteShares 1.75x Long AAPL Daily ETF (NASDAQ:AAPB). The ETF has $5 million in net assets, and it was set up in 2022 – at the same time as its Apple counterpart. The fund tracks the shares of Tesla, Inc. (NASDAQ:TSLA), seeking to deliver 175% of the daily percentage change in the share price of the electric vehicle manufacturer.
6. First Trust SkyBridge Crypto Industry and Digital Economy ETF (NYSE:CRPT)
Year to date returns: 81.42%
First Trust SkyBridge Crypto Industry and Digital Economy ETF (NYSE:CRPT) was set up in 2021 and has $18.4 million in net assets. It is part of the First Trust Advisors fund family. More than 99% of the fund has invested in stocks, and its top holdings include MicroStrategy Incorporated (NASDAQ:MSTR) and Coinbase Global, Inc. (NASDAQ:COIN).
GraniteShares 1.5x Long META Daily ETF (NASDAQ:FBL), First Trust SkyBridge Crypto Industry and Digital Economy ETF (NYSE:CRPT), GraniteShares 1.5x Long NVDA Daily ETF (NASDAQ:NVDL), and Valkyrie Bitcoin and Ether Strategy ETF (NASDAQ:BTF) are some top performing actively managed ETFs in 2023.
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Disclosure: None. 10 Best Performing Actively Managed ETFs in 2023 is originally published on Insider Monkey.