Top ETFs for July 2023

Top exchange-traded funds (ETFs) offer investors a cost-effective way to diversify their portfolios across different asset classes. ETFs track a particular index, sector or commodity and are traded on an exchange in the same way as common stocks, giving investors additional flexibility.

Below, we look at the top five equity, bond, fixed income, commodity and currency ETFs that have generated the best returns over the past month, excluding inverse and leveraged ETFs, as well as funds with less than $50 million in assets under management (AUM). ). All data below is as of June 28.

Stock ETF with the best returns over 1 month: Global X Blockchain ETF (BKCH)

• Performance 1 month: 16.58%
• Expense ratio: 0.5%
• Annual dividend yield: 0.65%
• Average daily volume over 30 days: 124,007
• Assets under management: $79.46 million
• Effective date: July 12, 2021
• Issuer: Mirae Asset Global Investments Co., Ltd.

BKCH tracks the Solactive Blockchain Index, a benchmark of global companies involved in blockchain technologies, such as digital asset mining, digital asset transactions and blockchain applications. The technology sector and the financial sector control the lion’s share of the sector allocation on this ETF at 51.3% and 27.41% respectively.

The top holdings of the ETFs include digital asset mining company Marathon Digital Holdings Inc. (MARA); Coinbase Global Inc. (COIN), the largest cryptocurrency exchange in the US; and Hut 8 Mining Corp. (HUT), a Canadian-based cryptocurrency mining company. While the fund doesn’t directly hold digital currencies, it has benefited from Bitcoin’s 8% rise over the past month.

Best 1 Month Bond ETF: First Trust Emerging Markets Local Currency Bond ETF (FEMB)

• One month performance: 5.01%
• Expense ratio: 0.85%
• Annual Dividend Yield: 5.71%
• Average daily volume over 30 days: 71,770
• Assets under management: $134.41 million
• Effective date: November 4, 2014
• Publisher: First Trust

FEMB has invested at least 80% of its net assets in bonds, notes and bills of exchange issued or guaranteed by issuers in emerging markets and denominated in the local currency. As a result, currency exchange rates have a significant impact on the fund’s overall return.

The fund invests in bonds of any maturity or credit quality, including unrated securities. Emerging countries with double-digit exposure in the ETF’s portfolio include Indonesia at 15.17%, Brazil at 12.47%, Malaysia at 11.08% and South Africa at 10.89%.

Fixed Income ETF with the Best 1 Month Return: InfraCap REIT Preferred ETF (PFFR)

• Performance 1 month: 5.85%
• Expense ratio: 0.45%
• Annual dividend yield: 8.57%
• Average daily volume over 30 days: 15,421
• Assets under management: $59.59 million
• Effective date: February 7, 2017
• Issuer: Virtus Investment Partners

PFFR tracks the Indxx REIT Preferred Stock Index, a benchmark composed of US-listed preferred securities issued by real estate investment trusts (REITs). The fund, which rebalances semi-annually, only selects securities with a yield of 3% or more and limits a single issue to a 10% weighting.

Top positions in the ETF portfolio are mortgage manager Annaly Capital Management Inc. (NLY), data center operator Digital Realty Trust Inc. (DLR) and broadband service provider Digital Bridge Communications Corp.

Commodity ETF with the best return over 1 month: United States Natural Gas Fund, LP (UNG)

• One month performance: 15.96%
• Expense ratio: 1.11%
• Annual Dividend Yield: N/A
• Average daily volume over 30 days: 17,663,625
• Assets under management: $1.20 billion
• Effective date: April 18, 2007
• Publisher: Marygold

UNG offers exposure to first month natural gas futures that are designed to track natural gas price movements in percentage terms. If the near-monthly contract falls within two weeks of expiration, the fund will invest in the next month’s contract.

The ETF primarily holds natural gas futures listed on the New York Mercantile Exchange (NYMEX), and may also invest in forward and swap contracts. UNG has gained momentum over the past month as data showed that natural gas inventories have risen more slowly than expected.

Currency ETF with the best returns in 1 month: Invesco CurrencyShares Canadian Dollar Trust (FXC)

• One month performance: 3.66%
• Expense ratio: 0.4%
• Annual Dividend Yield: 1.06%
• Average daily volume over 30 days: 35,424
• Assets under management: $92.88 million
• Effective date: June 21, 2006
• Publisher: Invesco

FXC offers direct exposure to the Canadian dollar (CAD) by holding physical currency in a JPMorgan deposit account, giving investors the option of holding the Loonie without having to open a currency account. The fund bears credit risk as there is no deposit guarantee on its holdings.

The ETF received purchase interest following a surprise rate hike from the Bank of Canada in early June to bolster its efforts to curb inflation.

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As of the date of writing this article, the author does not own any of the ETFs mentioned above.

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