These Are Your Top-Performing ETFs In Early 2024

By Andrew Prochnow

Following a robust beginning to the trading year of 2024, the ETF landscape has witnessed numerous offerings delivering notable returns during the initial months of the year. Unsurprisingly, the technology sector has emerged as one of the standout performers, with semiconductor stocks leading the charge.

However, it’s worth noting that AI-focused semiconductor stocks haven’t been the sole early winners in the trading year of 2024.

Alongside tech-focused ETFs, there’s also been strength in cryptocurrency and cannabis-focused ETFs, such as the Grayscale Bitcoin Trust (GBTC) and the Roundhill Cannabis ETF (WEED). And due to increased risks in the global shipping industry, rising shipping rates have also boosted ETFs such as the Amplify Commodity Trust (BDRY).

Interestingly, the Turkish country ETF-iShares MSCI Turkey ETF (TUR)-is also up in impressive fashion year-to-date, as is the VanEck Egypt Index ETF (EGPT). As highlighted below, the aforementioned themes account for most of the leaders from the ETF universe in early 2024:

• ProShares Ultra Semiconductors (USD), +67%
• Grayscale Bitcoin Trust (GBTC), +38%
• Breakwave Dry Bulk Shipping ETF (BDRY), +36%
• ProShares Ether Strategy ETF (EETH), +35%
• Bitwise Ethereum Strategy ETF (AETH), +34%
• Roundhill Cannabis ETF (WEED), +32%
• Valkyrie Bitcoin and Ether Strategy ETF (BTF), +31%
• Loncar Cancer Immunotherapy ETF (CNCR), +30%
• Amplify U.S. Alternative Harvest ETF (MJUS), +26%
• VanEck Semiconductor ETF (SMH), +24%
• ProShares Bitcoin Strategy ETF (BITO), +23%
• VanEck Egypt Index ETF (EGPT), +22%
• ProShares Ultra Telecommunications(LTL), +18%
• AdvisorShares Pure Cannabis ETF (YOLO), +17%
• Amplify Seymour Cannabis ETF (CNBS), +16%
• iShares MSCI Turkey ETF (TUR), +15%

In addition to the above, it should be noted that there have also been a large number of leveraged and inverse ETF winners so far 2024.

Importantly, however, many of those winners reflect the same core themes as those shown above, such as the T-Rex 2X Long NVIDIA Daily Target ETF (NVDX) and the 2x Bitcoin Strategy ETF (BITX).

More details on each of the aforementioned themes-cannabis, semiconductors, cryptocurrencies and Turkey/Egypt-are outlined below.

Cannabis Sector

One of the surprise winners in early 2024 has been the cannabis sector. The primary catalyst for higher stock prices has been widespread anticipation relating to the full legalization of cannabis at the federal level. In the near future, the U.S. Drug Enforcement Agency (DEA) is expected to reclassify cannabis from a Schedule 1 substance to a Schedule 3 substance.

This holds significance because substances classified as Schedule I are deemed to have no accepted medical applications and a high risk of abuse, significantly restricting research avenues and medical accessibility. By reclassifying cannabis to Schedule III, it would be acknowledged as having recognized medical benefits, facilitating greater access to research funding and broadening possibilities for medical treatment alternatives.

Consequently, the DEA’s decision to reschedule cannabis would mark a significant advancement for the industry. Nonetheless, cannabis stocks have also been uplifted by other favorable developments.

In Europe, Germany recently legalized the possession and consumption of cannabis in limited quantities. That’s a monumental development because Germany’s approach could eventually serve as a framework for the broader European Union (EU)-boosting the fortunes of the cannabis industry on the entire European continent, not just in Germany.

These positive advancements seem to have gained momentum, sparking additional enthusiasm that has spilled over into various sectors of the industry. Apart from edging closer to full federal legalization, the DEA’s rescheduling of cannabis is anticipated to deliver a fiscal boost to the cannabis sector. This is because the rescheduling would enable cannabis businesses to begin deducting business expenses.

Presently, cannabis businesses are unable to deduct business expenses due to IRS restrictions, stemming from the industry’s involvement with a controlled substance. Consequently, cannabis companies face disproportionately high tax rates, sometimes reaching as much as 70%.

Therefore, it’s evident how this tax modification could promptly enhance the industry’s profitability potential. Considering these factors, it’s clear why cannabis stocks have soared in early 2024 and why they could ascend even further once these potential developments materialize.

Turkish and Egyptian Country-Focused ETFs

Analyzed in a vacuum, the early 2024 gains in the Turkish and Egyptian country-focused ETFs would undoubtedly be viewed as a substantial positive. So for this year, the VanEck Egypt Index ETF (EGPT) and the iShares MSCI Turkey ETF (TUR) are up 22% and 15%, respectively.

However, these gains seem to be driven by concerns regarding the financial stability of the Turkish and Egyptian economies, casting a shadow over what would otherwise be viewed as positive developments.

In both Egypt and Turkey, significant depreciation of their respective sovereign currencies has fueled the stock market gains, as citizens opt to shift their cash holdings into stocks. In Turkey, the lira has depreciated by over 80% against the U.S. dollar in the past five years. In autumn 2021, 9 Turkish lira could purchase one dollar, but now, that figure has risen to 31.

To safeguard their wealth from the weakening lira, many Turkish citizens have invested their savings in the Turkish stock market. Consequently, the primary Turkish index, the BIST 100, reached a new all-time high last year and has already surged approximately 20% in 2024.

Similarly, Egypt faces a comparable situation. Since the beginning of 2022, the Egyptian pound has depreciated by around 50% against the dollar. The situation has deteriorated to the extent that Egypt is expected to execute a planned devaluation of its currency in the coming months, marking the fourth devaluation since the start of 2022.

While a currency devaluation theoretically enhances the competitiveness of exports, it also leads to higher import costs. This presents a significant challenge for Egypt, given its heavy reliance on food imports. As the world’s largest importer of grain, Egypt’s current shortage of foreign currency reserves exacerbates instability in its economy.

Egypt’s economy has become so embattled that it is now the second-largest borrower from the International Monetary Fund (IMF), behind only Argentina. And the country’s most recent inflation report revealed that prices are rising at an annualized rate of about 39%. That’s a key reason that Egyptian investors have flocked to the stock market, to try and keep pace with rampant inflation.

This background and context helps illustrate why the stock markets in Turkey and Egypt are somewhat akin to “lucky losers,” benefiting from the chaos spreading through other parts of their respective financial systems. As such, global investors and traders should tread carefully when considering positions that contain exposure to either region.

Semiconductor Sector

As evidenced by outperformance in the ProShares Ultra Semiconductors (USD) and the VanEck Semiconductor ETF(SMH), the semiconductor sector continues to be one of the hottest corners of the broader stock market.

And due to recent advancements in artificial intelligence (AI), most experts forecast that the demand for semiconductors will continue to surge during the next several years. Obviously, chipmakers with the most advanced AI technology, such as Nvidia (NVDA) and Advanced Micro Devices (AMD), have experienced the strongest gains.

It should be noted, however, that a rising tide hasn’t necessarily floated all boats. In many cases, the semiconductor companies that lack advanced AI-suitable offerings have seen their shares trade sideways, or lower, during the early part of 2024. This group includes companies like Intel (INTC) and ON Semiconductor (ON), which are down -11% and -6%, respectively, so far in 2024.

Due to this divergence, investors and traders have been scrambling to identify other winners in the broader AI value chain. That’s one reason that shares of Super Micro Computer (SMCI) have rocketed higher in 2024.

Super Micro operates in a lower margin niche of the broader AI value chain, building servers and other hardware/software for data centers. The company has experienced a sharp surge in demand for its products, as many data centers are being re-outfitted with AI-capable technologies.

Cryptocurrency Sector

In the cryptocurrency sector, performance in Bitcoin (BTC) and Ethereum (ETH) usually sets the tone for the broader sector. So with both of those digital coins posting impressive returns year-to-date in 2024, it’s no great surprise that crypto-focused ETFs have also outperformed to start the year.

In January, the creation of new spot Bitcoin ETFs ended up being a “sell the news” moment for the cryptocurrency sector. Since that time, however, the crypto sector has been surging, with Bitcoin (BTC) and Ethereum (ETH) posting impressive year-to-date gains. Thus far in 2024, Bitcoin has rallied by about 34%, while Ethereum has rallied by 42%.

Not surprisingly, bullish sentiment has also spilled over into the broader sector. Listed below are some of the top-performing large cap and small cap digital coins in 2024 (year-to-date returns through mid-February 2024).

Top Performing Cryptocurrencies in 2024 (Small Cap)

• Ritestream (RITE) +2,100%
• Badmad Robots (METAL) +1,200%
• Rocky (ROCKY) +1,000%
• Bomber Coin (BCOIN) +900%
• Three Kingdoms (TTK) +725%
• Dopex Rebate Token (RDPX) +630%
• AXL INU (INU) +630%
• Heroes TD (HTD) +560%
• Bomb Money (BOMB) +550%
• Covenants (UNIFI) +460%

Top Performing Cryptocurrencies in 2024 (Large Cap)

• Sui (SUI) +135%
• Bittensor (TAO) +110%
• Flare (FLR) +80%
• Beam (BEAM) +65%
• Celestia (TIA) +60%
• Stacks (STX) +41%
• Immutable (IMX) +41%
• ChainLink (LINK) +33%
• Sei (SEI) +31%
• Arbitrum (ARB) +31%