Hello! This week’s ETF Wrap looks at top performers in the first half of 2023, as well as flows, as stocks rally and crypto-related funds jump so far this year.
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Cryptocurrency-related exchange-traded funds are skyrocketing in the first half of 2023 as bitcoin rebounds from last year’s selloff, outperforming other U.S.-listed ETFs so far this year, according to CFRA Research.
The top 15 ETFs in terms of performance this year have exposure to crypto or blockchain, said Aniket Ullal, head of ETF data and analytics at CFRA, in a phone interview. That’s based on a screening of nonleveraged ETFs, he said, with the Valkyrie Bitcoin Miners ETF
WGMI,
topping the list with a year-to-date return of nearly 189% percent through June 27.
Crypto funds got a recent boost from this month’s application by BlackRock, the world’s largest asset manager, for a spot bitcoin ETF, according to Ullal. “It’s created more optimism about a spot bitcoin ETF being approved,” potentially, by the Securities and Exchange Commission, he said.
| Top 15 ETFs so far this year | %Performance |
| Valkyrie Bitcoin Miners ETF WGMI, | 188.8 |
| VanEck Digital Transformation ETF DAPP, | 146.1 |
| Global X Blockchain ETF BKCH, | 130.9 |
| Bitwise Crypto Industry Innovators ETF BITQ, | 128.6 |
| Invesco Alerian Galaxy Crypto Economy ETF SATO, | 125.1 |
| Global X Blockchain & Bitcoin Strategy ETF BITS, | 106.0 |
| iShares Blockchain and Tech ETF IBLC, | 92.0 |
| Simplify Bitcoin Strategy PLUS Income ETF MAXI, | 84.8 |
| Hashdex Bitcoin Futures ETF DEFI, | 84.2 |
| ProShares Bitcoin Strategy ETF BITO, | 81.7 |
| VanEck Bitcoin Strategy ETF XBTF, | 81.3 |
| Fidelity Crypto Industry and Digital Payments ETF FDIG, | 79.6 |
| Valkyrie Bitcoin Strategy ETF BTF, | 79.4 |
| First Trust SkyBridge Crypto Industry & Digital Economy ETF CRPT, | 76.0 |
| Grayscale Future of Finance ETF GFOF, | 73.0 |
| Source: CFRA RESEARCH, DATA AS OF JUNE 27, 2023 |
The largest bitcoin exchange-traded fund is the ProShares Bitcoin Strategy ETF
BITO,
said Ullal. The ETF, which primarily invests in bitcoin futures contracts, has around $1 billion of assets under management, according to FactSet data. While the fund does not invest directly in the cryptocurrency, it has closely tracked spot-bitcoin performance, ProShares says in the ETF’s fact sheet at the end of March.
Bitcoin prices plunged last year in a tumultuous 2022 for markets, with the cryptocurrency sinking as inflation soared and stocks and bonds sold off. Markets sank as the Federal Reserve battled the high cost of living with a rapid pace of interest-rate hikes that has slowed this year.
On Thursday afternoon, bitcoin
BTCUSD,
was trading around $30,562, according to CoinDesk data. That’s about double its trading level in late 2022, but still well below its peak approaching $70,000 in 2021.
In mid-June, BlackRock applied for a spot bitcoin ETF named iShares Bitcoin Trust, according to a document filed with the SEC. Bitcoin prices were then trading around $25,000. On Thursday, Fidelity refiled paperwork for a spot bitcoin ETF.
Meanwhile, a mix of stock and bond ETFs have seen the biggest inflows in the first half of 2023.
The Vanguard S&P 500 ETF
VOO,
has attracted the most capital this year through June 27 with flows of around $13.8 billion, followed by the iShares 20+ Year Treasury Bond ETF
TLT,
at around $11.3 billion and iShares MSCI USA Quality Factor ETF
QUAL,
at $9.9 billion, according to Ullal. The JPMorgan Equity Premium Income ETF
JEPI,
garnered the next largest inflows over the same period at $9.7 billion, while the iShares Core U.S. Aggregate Bond ETF
AGG,
ranked fifth by attracting $8.3 billion, he said.
Among actively managed equity funds, the JPMorgan Equity Premium Income ETF, which invests in low-volatility stocks, while using a covered call options strategy to generate income, has raked in the most inflows this year through June 27, said Ullal.
That’s despite the fund lagging behind the S&P 500 over the same period with a total return of 4.8%, according to FactSet data.
The strategy used by the JPMorgan Equity Premium Income ETF is designed to fare relatively well in a “horizontal” stock market, not to beat it when equities are rising quickly, he said. Shares of the SPDR S&P 500 ETF Trust
SPY,
have soared a bit more than 14% this year through June 27, for a total return of 14.9%.
Some people may have been “caught off guard” by the U.S. stock market’s rally during the first half of this year, said Ullal.
As usual, here’s your look at the top- and bottom-performing ETFs over the past week through Wednesday, according to FactSet data.
The good…
| Top Performers | %Performance |
| ARK Next Generation Internet ETF ARKW, | 4.1 |
| ARK Fintech Innovation ETF ARKF, | 4.0 |
| U.S. Global Jets ETF JETS, | 3.7 |
| iShares US Transportation ETF IYT, | 3.6 |
| ARK Innovation ETF ARKK, | 3.5 |
| Source: FactSet data through Wednesday, June 28. Start date June 22. Excludes ETNs and leveraged products. Includes NYSE, Nasdaq and Cboe traded ETFs of $500 million or greater |
…and the bad
| Bottom Performers | %Performance |
| KraneShares Global Carbon Strategy ETF KRBN, | -6.7 |
| FirstTrust NYSE Arca Biotechnology Index Fund FBT, | -4.3 |
| Xtrackers MSCI EAFE Hedged Equity ETF DBEF, | -4.1 |
| Invesco DB Agriculture Fund DBA, | -4.1 |
| First Trust Global Tactical Commodity Strategy Fund FTGC, | -4.0 |
| Source: FactSet data |
New ETFs
- Schwab Asset Management announced on June 26 the launch of the Schwab High Yield Bond ETF (SCYB), which is expected to begin trading on or about July 11.
- Fidelity plans to convert six actively managed “enhanced index” mutual funds into equity ETFs, according to June 28 filings with the Securities and Exchange Commission. The Fidelity International Enhanced Index Fund
FIENX,
+1.15%
will become Fidelity Enhanced International ETF; the Fidelity Large Cap Core Enhanced Index Fund
FLCEX,
+1.22%
will become Fidelity Enhanced Large Cap Core ETF; Fidelity Large Cap Growth Enhanced Index Fund
FLGEX,
+1.44%
will become Fidelity Enhanced Large Cap Growth ETF; Fidelity Large Cap Value Enhanced Index Fund
FLVEX,
+0.88%
will become Fidelity Enhanced Large Cap Value ETF; Fidelity Mid Cap Enhanced Index Fund
FMEIX,
+0.85%
will become Fidelity Enhanced Mid Cap ETF; Fidelity Small Cap Enhanced Index Fund
FCPEX,
+0.46%
will become Fidelity Enhanced Small Cap ETF. - Volatility Shares said June 27 that it launched the 2x Bitcoin Strategy ETF
BITX,
-2.47% ,
which provides leveraged bitcoin-linked exposure. The fund tracks the S&P CME Bitcoin Futures Daily Roll Index before fees and expenses, according to the announcement.