With exchange traded funds (ETFs), investors can enjoy more exposure to high-potential stocks, without having to micromanage complex portfolios. ETFs can be purchased just like regular stocks, and are tracked by the same exchanges. The best funds also pay dividends, creating the potential for long term returns as well as profits at sale.
For retirees and income-minded investors, ETFs are worth consideration.
As the end of the year approaches, it’s possible to identify the best performing funds of 2019. The following are two of the best based on year to date growth, with more potential for the year ahead.
Global X Internet of Things ETF (NASDAQ: SNSR)
With the rollout of 5G internet already underway in the United States, the potential for the Internet of Things (IoT) is increasing. IoT devices rely on fast network connections with low latency. That’s exactly what 5G offers. Technology improvements will make consumer, industrial, and commercial devices more advanced and easier to monitor. This could aid the development of self-driving cars, fully automated production lines, home automation, and much more.
The Global X Internet of Things ETF is comprised of dedicated IoT companies as well as semiconductor companies and diversified device companies. It is carefully managed with a turnover of 17% and a reasonable dividend of 1.25%.
Investors who are interested in IoT will find this fund to be a great way to increase exposure without the overhead of making numerous diversified stock picks. It’s currently up 40.6% in 2019.
Invesco Aerospace and Defense ETF (NYSE: PPA)
Even with Boeing’s ongoing safety scandal and the 737 MAX groundings, the aerospace and defense sectors have provided strong returns for investors. Individual components of this fund, including Lockheed Martin, Northrop Grumman, and Honeywell are all up in the double digits year to date.
This fund is up 39.4% since the start of the year. The dividend is a modest 0.94%, but historical growth shows that it’s a strong pick. Ten years ago, the fund traded at $20.51. Today, it trades at $68.45.
Investors looking for a long term holding that is tied to both general aerospace and defense will find this to be one of the best options available.
ETFs are Great Alternatives to Stocks
Some carefully researched ETFs will fit right into a portfolio made up of individual stocks. They’re a great way to diversify while leveraging the experience of dedicated financial managers.
As with any investment decision, consider the above ETFs within the context of your entire portfolio.
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