The 10 best performing ETFs so far this year are dominated by weed stocks

Published Tue, Mar 9 20212:38 AM EST

Allocation into ETFs — or exchange-traded funds — has continued to rise this year despite the volatility brought about by the pandemic. And the top performing funds are dominated by one theme: weed. In fact, marijuana-focused ETFs constitute half of the top 10 best performers in the first two months of 2021 according to data provided by Refinitiv. ETFs are investment funds that can be easily traded throughout the day on exchanges. They attracted record investment of $7.99 trillion worldwide by the end of 2020, according to research consultancy ETFGI . And investors' interest in ETFs shows no sign of slowing. A survey conducted by U.S. private bank Brown Brothers Harriman, published Monday, found that 72% of global financial advisors, institutional investors and fund managers plan to increase their ETF allocation in the next 12 months. And eight in 10 investors surveyed plan to increase their exposure to thematic ETFs. Here's the list of the top 10 performing ETFs this year, according to Refinitiv: Over the year to Feb. 28, the BetaPro Marijuana Companies 2x Daily Bull ETF had returned 116.36% in pound sterling terms, leading the global ETF market, according to Refinitiv data. Four more cannabis-themed ETFs featured in the top 10: The Amplify Seymour Cannabis ETF was the sixth-best performing worldwide, returning 69.53%, putting it just ahead of the Global X Cannabis ETF (64.9%). Horizons Marijuana Life Sciences ETF has returned 59.93% to the end of February, and its U.S. dollar-denominated counterpart was up 58.96%. Oil ETFs accounted for three of the top 10, according to Refinitiv. The MicroSectors US Big Oil Index 3X Leveraged ETN was the second-best performing ETF worldwide, returning 104.54% over January and February, closely followed by Direxion Daily S & P Oil & Gas Exploration & Production Bl 2X Shares with 78.93%. The iPath Exchange Traded Notes S & P GSCI Oil TR A was the sixth-strongest performer overall with 69.98% total return. In fourth and fifth place were the Direxion Daily Regional Banks Bull 3X Shares — up 75.27% — and the GraniteShares 3x Long Glencore Daily ETP , returning 74.57%. A 'bumper year' for ETFs The BBH survey gauged the preferences and expectations of 382 institutional investors, financial advisors and fund managers around the world, and found that interest grew notably in thematic, actively managed and fixed income ETFs. Looking ahead, BBH Senior Vice President Antonette Kleiser told CNBC that investors were on the lookout for more cryptocurrency and digital asset offerings. "It's not a surprise that it is there, it is a hot topic and there is increased interest from institutional investors in this area of thematics, and I think there is a general desire to understand the crypto asset market," she said Friday. "There has been through 2020 a focus on gold as well. If I look at what our clients are looking at, it's thematics more around AI and technology, and fixed income was certainly a theme that we were seeing demand for." Fixed income ETFs saw strong inflows in particular following the market volatility of the first quarter of 2020, and 66% of respondents to BBH's survey said they planned to increase their allocation this year. Some 42% said they would buy fixed income ETFs during periods of heightened volatility where the ETF offered transparency and liquidity when compared to the individual bonds. "2020 was a year of volatility, but it was also a banner year for ETFs," said Shawn McNinch, global head of ETF services at BBH. "The resiliency of the ETF structure and supporting capital market infrastructure saw them not only weather the storm but cement their status as a go-to option for investors to trade, especially in times of market stress."

The world's first marijuana-focused exchange-traded fund opened on the Toronto Stock Exchange. (File photo).

Mark Blinch | Reuters

In fact, marijuana-focused ETFs constitute half of the top 10 best performers in the first two months of 2021 according to data provided by Refinitiv.

ETFs are investment funds that can be easily traded throughout the day on exchanges. They attracted record investment of $7.99 trillion worldwide by the end of 2020, according to research consultancy ETFGI.

And investors' interest in ETFs shows no sign of slowing. A survey conducted by U.S. private bank Brown Brothers Harriman, published Monday, found that 72% of global financial advisors, institutional investors and fund managers plan to increase their ETF allocation in the next 12 months. And eight in 10 investors surveyed plan to increase their exposure to thematic ETFs.

Here's the list of the top 10 performing ETFs this year, according to Refinitiv: