Summer is over. It’s time to remove dead weight from your portfolio. That means ditching underperforming stocks and dropping overvalued assets. After selling some shares, you’ll have a few bucks to play with on the stock market. What should you do with the extra cash? You can start by investing in the best ETFs available.
An exchange-traded fund (ETF) is a package of assets that includes stocks, bonds, commodities, or foreign currencies. Many ETFs are devoted to a specific theme, so investors can target companies and sectors that they care about. One example is the iShares MSCI Emerging Markets ETF (EEM)—an ETF devoted to emerging-market companies such as Samsung, Alibaba, China Mobile, and Taiwan Semiconductor.
Another example is the First Trust RBA American Industrial Renaissance ETF (AIRR), an ETF that tracks the performance of American manufacturers and community banks. The $174 million fund is almost entirely covered by U.S.-based stocks, so investors can bet on America’s economic revival.
ETFs make up a growing part of the market. At the beginning of 2017, total investment in ETFs accounted for 23% of total share volume. Total U.S. ETFs recently topped $3 trillion. Moody’s predicts that ETFs will cover more than half the stock market by 2024. There’s a reason so many investors are getting excited.
If that catches your interest, here are some of the best ETFs for investors this fall.
First Trust NYSE Arca Biotech (FBT)
This fund has been crushing in 2017, gaining 32% since January 3. The $1.14 billion ETF includes Kite Pharma, Juno Therapeutics, Neurocrine Biosciences, Gilead Sciences, and other major biotech stocks. It tracks the Amex Biotechnology Index, investing at least 90% of its assets in the Index at any given time. The Arca Biotech ETF is currently at $123, so it’s an affordable option.
iShares MSCI China (MCHI)
This $2.62 billion ETF includes many of the same assets as the iShares MSCI Emerging Markets ETF. The difference is MSCI China only includes stocks based in China—Tencent Holdings, Alibaba, Bank of China, Baidu Incorporated, etc.
This is a good play for China-focused investors. It carries a big risk, however. An IMF forecast expects China’s GDP growth to grow by 6.7% this year but only 6.4% from 2018-2020. Slower growth in China would likely mean weaker performances by Chinese stocks.
iShares North American Tech ETF (IGM)
This $1.26 billion ETF is up 25% from the start of 2017. It’s not hard to understand why: It’s deep into the FANG stocks—Facebook, Amazon, and Google (the only FANG missing here is Netflix). These stocks have torn the lid off the market in 2017. Facebook (FB) has gained 46% since early January. Amazon (AMZN)—30%. Alphabet Inc. (GOOG)—Google’s umbrella company—has gained 17%.
The North American Tech ETF also includes Apple, Microsoft, Cisco Systems, and Oracle. If you’re looking to bet on Silicon Valley, this is one of the best ETFs out there.
Make America Great Again (MAGA)
This ETF launched in July with a specific purpose in mind: To funnel money into companies that support the Republican Party. MAGA uses a system to track companies “whose employees and political action committees are highly supportive of Republican candidates for election to the United States Congress, the Vice Presidency, or the Presidency and related Republican Party committees.”
The fund just went live on September 14, so it’s too early to analyze performance. That being said, it’s an option for investors who want to put their money where their mouth is.