Market Overview

Bitcoin, China, And AI Highlight Some Of The Year's Best ETFs

Bitcoin, China, And AI Highlight Some Of The Year's Best ETFs

The S&P 500 is up 19.5 percent in 2017. The MSCI EAFE Index is up slightly more, while the MSCI Emerging Markets Index is higher by 33 percent. In other words, it's been hard to go wrong with stocks this year, regardless of geographic preference, and a slew of exchange-traded funds confirm this year's bullishness.

Over 2,200 exchange-traded products trade in the U.S. and about 75 are up 50 percent or more this year, according to Finviz data. Sure, a fair amount of those 75 are leveraged ETFs, but remembering that leveraged ETFs aren't intended to be held over the course of a month let alone a year, leveraged fare is excluded from this examination of 2017's best ETFs.

That's okay, because the following ETFs didn't need leverage to deliver stellar 2017 returns.

Did Someone Say Bitcoin?

Cryptocurrencies are taking the financial world by storm and that asset class has played a big role in helping the ARK Web x.0 ETF (NYSE: ARKW) gain more than 88 percent this year.

ARKW is often highlighted for its almost 8 percent stake in the Bitcoin Investment Trust (OTC: GBTC), but the ETF has exposure to other parts of the digital currency trade as well. Other holdings in ARKW that have some cryptocurrency exposure include Nvidia Corporation (NASDAQ: NVDA), Square Inc. (NYSE: SQ), and PayPal Holdings Inc. (NASDAQ: PYPL).

ARKW's stablemate, the ARK Innovation ETF (NYSE: ARKK), has a 7 percent stake in the Bitcoin Investment Trust, a position that has helped ARKK surge 89 percent this year.

Calling On China

The MSCI China Index is up 52 percent this year, but many investors are passing on traditional China ETFs. On the other hand, a new generation of China ETFs are surging. When excluding leveraged funds, seven China ETFs are up at least 50 percent this year. Several of these funds are, not surprisingly, heavily allocated to Chinese Internet and technology stocks.

Up about 77 percent this year, the WisdomTree China ex-State-Owned Enterprises Fund (NASDAQ: CXSE) is one of the stars among China ETFs. As its name implies, CXSE excludes Beijing-controlled companies to focus on higher growth areas of the world's second-largest economy. Technology and consumer discretionary names combine for over 56 percent of the ETF's weight.

Investors are warming up to the CXSE story. The ETF has taken in nearly $133 of its roughly $155 million in assets under management just this year.

Mr. Roboto

There was a time when the idea of an ETF dedicated to artificial and intelligence investments would have been dismissed as too much of a niche idea.

The Robo Global Robotics&Automation ETF (NASDAQ: ROBO) and the Global X Robotics & Artificial Intelligence ETF (NASDAQ: BOTZ) have put those criticisms to rest. This pair of robotics ETFs is up an average of 51 percent in 2017. Confirming investors' interest in robotics investing, BOTZ and ROBO have added $791.5 million and $419.6 million, respectively, in new assets this year.

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