This year has proven to be a rather successful yet volatile year on Wall Street; equities managed to come out on top after tumultuous rounds of eurozone debt drama, fiscal cliff talks and spotty economic data. Despite the bumps in the road, many investors were rewarded quite handsomely, as certain corners of the market exhibited stellar performances. From the once feared real estate market to investments in Poland, we outline the top 10 best performing ETFs in 2012 (Year-to-date returns as of 12/20/2012) [see also How To Pick The Right ETF Every Time]:
1. Dow Jones U.S. Home Construction Index Fund (ITB), Up 80%
Although the housing market has still not fully recovered from its abysmal fall in 2008, this year has been rather promising for the industry. iShares’ popular ITB is linked to an index that holds roughly 28 homebuilding companies, and year-to-date the fund has surged over 80%.
2. India Consumer ETF (INCO), Up 55%
As one of the largest economies in the world, India has always been a powerhouse nation. Despite experiencing some bumps in the road over the last few years, the country’s consumer market remains strong. In 2012, INCO, which is comprised of about 30 consumer stocks, gained over 50% and saw inflows of $4.6 million.
3. Market Vectors Biotech ETF (BBH), Up 51%
Offering investors an opportunity to benefit from companies developing treatments for various health conditions, this ETF continues to be one of the top performers, jumping 50% this year alone. Other biotech funds, such as FBT and IBB, have also enjoyed handsome returns [Download 101 ETF Lessons Every Financial Advisor Should Learn].
4. MSCI Philippines Investable Market Index Fund (EPHE), Up 48%
A young and increasingly wealthy population and a healthy banking system are two of the many traits that bolstered this Philippines ETF. EPHE invests in about 43 stocks, primarily from the consumer, real estate, utilities and financial services sectors. The fund saw inflows of over $175 million this year alone, and it is currently up nearly 43%.
5. Egypt Index ETF (EGPT), Up 45%
Egypt’s equity market has been on fire this year after enduring a nasty decline heading into the final months of 2011. This ETF makes a heavy allocation to small cap equities, which has helped it rake in stellar returns to the tune of nearly 45%. EGPT was up almost 100% earlier in the year, but since then has fallen from its highs [see also Africa-Centric Portfolio].
6. FTSE ERPA/NAREIT Asia Index Fund (IFAS), UP 45%
Though not one of the most popular Asia ETFs out there, IFAS has certainly been flying under the radar for the majority of the year, rewarding its lucky investors with handsome returns. The fund, which is comprised of about 80 individual holdings, offers exposure to the real estate sector of the Asian equity market.
7. Global ex-US Real Estate Fund (DRW), Up 39%
Another real estate fund, this ETF takes a global approach to this corner of the market, investing in real estate companies outside of the United States. With nearly a quarter of its assets allocated to stocks from the wealthy and thriving Hong Kong, it is perhaps not surprising to see how well this fund has performed.
8. MSCI Poland Investable Market Index Fund (EPOL), Up 39%
Poland’s economic resilience during an otherwise gloomy stretch of history for the European currency bloc has been duly noted by many investors, who quickly poured millions of dollars of foreign capital into the eastern European nation. Year-to-date, EPOL has gained nearly 37% and many expect the fund to continue performing well next year [see also 13 Rapid Fire ETF Ideas For 2013].
9. Health Care GEMS ETF (HGEM), Up 36%
As the name suggests, this ETF has been somewhat of a hidden “gem” this year, gaining over 35% though inflows only totaled a meager $3 million. The fund invests in about 30 of the largest emerging market companies in the healthcare industry. HGEM features exposure to equities from India, South Africa and China.
10. Industrial GEMS ETF (IGEM), Up 36%
Yet another offering from EG Shares, this ETF puts an emerging market twist on the industrial equities market, a potentially lucrative yet volatile sector. Year-to-date, IGEM has gained over 35%, but saw less than $3 million in total inflows.
Disclosure: No positions at time of writing.