2024 was an incredible year for exchange-traded funds (ETFs) as an investment vehicle, with investors pouring a record $1.1 trillion in new assets into these funds. With new ETFs constantly being launched, investors now have over 12,000 different options to choose from.
The strong performance of the S&P 500 has undoubtedly helped drive investor attention to ETFs, but the wide variety of strategies, approaches, asset classes represented, and other factors present in the space have combined to make ETFs ubiquitous. However, choosing the “best” ETFs of 2024 that will serve as a starting point for considering new investments in 2025 is difficult—some of the best-performing funds use leverage and daily resets to amplify the immediate returns of certain indexes, making it a poor choice for investors with a buy-and-hold strategy.
Three of the more traditional ETFs that have nevertheless distinguished themselves with strong performance in 2024 include the Invesco S&P 500 Momentum ETF. NYSEARCA: SPMOAmerican Century Focused Dynamic Growth ETF NYSEARCA: FDGand Hartford Large Cap Growth ETF Bats: HFGO. Moreover, all three funds could continue this momentum in the new year.
Invesco S&P 500 Momentum ETF: Best of the Best Large-Cap Companies
Invesco S&P 500 Momentum ETF today
Invesco S&P 500 Momentum ETF
As of 01/17/2025 16:10 Eastern
- 52 week range
- $66.52
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$98.79
- Dividend yield
- 0.96%
- Assets under management
- $4.21 billion
As of January 15, 2025, SPMO had an annualized return of 46.8%, easily beating the broader market. This factor ETF takes a common-sense approach: Find large-cap stocks that have seen strong price performance recently and focus on them. The fund’s goal is to identify the 100 S&P stocks that outperformed their peers over the past year, excluding the past month, after adjusting for volatility.
The SPMO approach favors mega-cap stars such as NVIDIA Corp. NASDAQ: NVDA and Amazon.com Inc. NASDAQ:AMZNTherefore, investors with individual positions in some of the most popular large-cap companies in the US should double-check the SPMO basket to ensure they are not inadvertently skewing their allocation by doubling up on some of these companies. Additionally, SPMO is not a broadly diversified momentum fund (though that’s not the point), but with an expense ratio of 0.13%, this ETF makes a compelling case for inclusion in many portfolios this year.
American Century Focused Dynamic Growth ETF: High Performance and Opacity
American ETF CenturyFocused Dynamic Growth today
American ETF CenturyFocused Dynamic Growth
As of 01/17/2025 16:10 Eastern
- 52 week range
- $71.10
▼
US$109.95
- Assets under management
- $7.01 million
FDG returned 47.3% for the year to January 15, 2025, a strong recommendation for the fund’s somewhat unusual approach. This ETF is what’s called an active opaque fund, meaning fund managers don’t have to disclose their specific holdings as regularly as with traditional ETFs. As an actively managed fund, it has a higher expense ratio than many of its passively managed counterparts, with investors spending 0.45% to hold FDG.
FDG’s mandate is simple: focus on U.S. mid- and large-cap companies with strong growth and profitability potential. As a relatively recent fund (it launched in 2020 after the SEC approved active non-transparent funds last year), it has a limited track record of performance. However, the fund’s performance in 2024 may be enough to entice some investors in the new year.
Hartford Large Cap Growth ETF: A narrow basket of the largest US companies
Hartford Large Cap Growth ETF Today
Hartford Large Cap Growth ETF
- Assets under management
- US$127.00 million
HFGO is another actively managed fund that became fully transparent in July 2024. This ETF also has a simple guiding principle: It looks for growth stocks with early signs of accelerating fundamentals. In practice, this means the portfolio is heavily weighted toward information technology companies and heavily weighted toward U.S. large-cap companies. Although asset information is publicly available and updated regularly, the precise methodology for separating portfolio components is less obvious to outside investors.
As of January 15, 2025, there are only 42 assets in the HFGO basket. Its two largest positions – Apple and NVIDIA, respectively – together account for about 25% of invested assets. This makes HFGO a great option for investors looking for broad exposure to many of the biggest names in US stocks.
As an actively managed fund, HFGO has an expense ratio of 0.59%. This is higher than many competitors, but the fund’s performance history may warrant a higher fee. HFGO returned 41.7% over the last year as of January 15, 2025.
Before you consider the Invesco S&P 500 Momentum ETF, here’s what you need to hear.
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