Despite a bumpy road riddled with trade tensions, rate hike drama and global growth fears, stocks are pacing for their best first half in 22 years and are hovering near record levels.
With just three more trading days left in June, the has rallied more than 17% in 2019, pushing the SPDR S&P 500 ETF to new highs. ETF inflows remain positive but choppy — and are slowing down significantly from a year ago.
Average monthly inflows have fallen from $30 billion to closer to $10 billion — a rate Nick Colas from DataTrek Research said will be the new norm.
"We're not going to have this monster growth that we had in the middle part of the decade," Colas said Monday on CNBC's "ETF Edge." "It's just going to be slower and more organic."
And so far, the U.S. has seen total inflows of roughly $68 billion — about half of what we saw by this time last year, according to ETF.com — slowing but still growing.
Still, the ETF business has had some notable winners this year — and it's a fairly diverse group leading the charge.
Top-performing ETFs in 2019 (excluding leveraged and inverse ETFs):
- Invesco Solar ETF: up 51%
A popular ESG (Environmental, Social & Governance) play — a theme that's been gaining traction in the U.S. this year. Solar stocks have been getting a boost from clean energy initiatives like California's 2020 New Homes Mandate — which will require all new homes built in and after 2020 to include solar panels. Top holdings include solar energy names like First Solar, SolarEdge Technologies and Enphase Energy.
- Invesco DWA Technology Momentum ETF: up 40%
A basket of tech names that tracks fast-growing firms that are showing relative strength — a key technical momentum indicator. Top holdings include Twilio, MongoDB, Match Group and Square.
- Renaissance IPO ETF: up 37%
A basket of 60 of the most recent large IPOs. No surprises here — the IPO market has been red hot this year, bolstered by record highs in the stock market. The average first-day pop of a new issue has been 22% — well above the historic average return of 12-15%. Top holdings include Okta, Spotify, Roku and DocuSign.
- Global X MSCI Greece ETF: up 37%
Greek stocks are leading the rebound in European equities this year — bouncing back from near-30-year lows in late December on signs that Greece's economy could be clawing its way back ahead of key elections this year. Top holdings include the largest, most liquid Greek companies like Hellenic Telecom and Alpha Bank.
- Invesco WilderHill Clean Energy ETF: up 36%
Another way to bet on the clean energy story. Top holdings include SunPower, First Solar, SolarEdge Technologies and Daqo New Energy Corp.
- iShares MSCI Argentina & Global Exposure ETF: up 36%
The second largest South American county recently introduced policies to make its market friendlier to foreign investors. Emerging markets are also set to get a boost from lower interest rates. Top holdings by weight include Mercadolibre Inc, Tenaris SA, Globant SA and Grupo Financiero Galicia.
- ARK Genomic Revolution ETF: up 34%
ARK seeks to generate alpha with actively managed ETFs and focuses on cutting-edge technology and disruption in the genome sequencing space — particularly by using artificial intelligence. Top holdings include Illumina, Invitae, Intellia and CRISPR Therapeutics.
Clearly, the momentum trade has been big this year — a trend that Colas sees carrying over into the second half.
"I see momentum as being a big theme," he said. "And then a bit of 'dash-for-trash' with some of these third-tier emerging markets that just got very depressed and now, with rates coming down, are beginning to lift again."
But these big winners won't necessarily set the same tone for the rest of the year. Keep in mind, the best-performing ETF in the first quarter was the ETFMG Alternative Harvest ETF. The cannabis play bounced back from a steep sell-off in the fourth quarter and has been holding up but trading sideways ever since.