Bullish momentum has certainly been a dominant force on Wall Street thus far in 2013, with major U.S. equity indexes rallying into uncharted territory, hitting fresh 5-year highs. Bolstering equities has been a slew of encouraging economic data, primarily from the U.S., as well as a surprisingly successful earnings season. And though nearly every corner of the stock market has fared quite well, there have been some superb individual standouts that have outperformed major indexes by significant amounts [see also How to Pick The Right ETF Every Time].
In the ETF space, three funds have managed to blow its competitors out of the water, posting double digit year-to-date returns: the Market Vectors Indonesia Small-Cap ETF (IDXJ), SPDR S&P Transportation ETF (XTN), and the KBW Capital Markets Portfolio (KBWC). The chart below highlights these three ETFs, comparing the performances and volatility to the broad-market benchmark SPY (data as of March 21, 2013). Note that the size of each bubble is based on returns over the trailing 4-week period.
Market Vectors Indonesia Small-Cap ETF (IDXJ, C+) – Up 28.9%
This offering from Van Eck gives investors a way to tap into the Indonesian equity market, focusing on small-cap companies which generally are a better reflection of the local economy. The fund has gained 28.9% thus far in 2013 and 11% over the trailing 4-week period, largely due to Indonesia’s encouraging growth rates and companies’ improved earnings outlook. Investors should note, however, that the fund has only $6.5 million in assets and trades less than 7,400 times a day [see Asia-Centric ETFdb Portfolio].
SPDR S&P Transportation ETF (XTN, A) – Up 20.3%
This fund is designed to give investors exposure to the transportation sub-industry of the S&P 500. Top holdings include Swift Transportation (SWFT), Delta Air Lines (DAL), and J.B. Hunt Transport Services (JBHT). While this industry suffered in 2012, transportation equities have picked up steam this year as the global economic outlook becomes more optimistic. Thus far, XTN is up 20.3% year-to-date and nearly 8.5% over the trailing 4-week period.
KBW Captial Markets Portfolio (KBWC, B-) – Up 19.8%
This ETF invests in companies that do business as broker-dealers, asset managers, trust and custody banks or exchanges that are publicly-traded. KBWC’s top holdings include State Street (STT), Morgan Stanley (MS), and Goldman Sachs (GS). Alongside an upward trend in financial equities this year, KBWC has gained nearly 20% year-to-date. Over the trailing 4-week period, however, the fund has only gained 2.3% – slightly less than SPY’s 2.6% uptick. It should be noted that KBWC is the most volatile fund on this list.
Disclosure: No positions at time of writing.