2024 was a banner year for exchange-traded funds (ETFs) as an investment vehicle, as investors transferred a record $1.1 trillion of new assets into these funds. With new ETFs being launched all the time, investors now have over 12,000 different options to choose from.
The strength of the S&P 500’s performance has undoubtedly been instrumental in drawing investor attention to ETFs, but the wide range of strategies, approaches, asset classes represented and other factors found throughout the space have combined to make ETFs ubiquitous. However, choosing the “best” ETFs for 2024 to serve as a starting point for considering new investments in 2025 is difficult – some of the best-performing funds use leverage and daily resets in an attempt to inflate the intraday returns of certain indexes, making… Their options are bad for buy and hold investors.
Three traditional ETFs that nonetheless stood out for their strong performance through 2024 include the Invesco S&P 500 Momentum ETF NYSEARCA:SPMOa dynamic growth ETF focused on the American Century NYSEARCA:FDGand the Hartford Large Cap Growth Fund (ETF). Bat: HFGO. Moreover, these three funds could continue this momentum into the new year.
Invesco S&P 500 Momentum ETF: Best Large Caps
Invesco S&P 500 Momentum ETF today
Invesco S&P 500 Momentum ETF
As of 01/17/2025 at 04:10 PM ET
- 52 week range
- $66.52
▼
$98.79
- Dividend yield
- 0.96%
- Assets under management
- $4.21 billion
SPMO enjoyed a one-year return as of January 15, 2025 of 46.8%, easily beating the broader market. This factor ETF takes a logical approach: look for large-cap stocks with a recent history of strong price performance and focus narrowly on them. The fund aims to identify 100 Standard & Poor’s stocks that have outperformed their peers in the past year, excluding the last month, after adjusting for volatility.
The SPMO approach favors huge stars like NVIDIA Corp. Nasdaq: NVDA And Amazon.com Inc. Nasdaq: AMZNso investors with individual positions in some of the most popular large-cap U.S. companies should double-check their SPMO basket to make sure they’re not accidentally skewing their distributions by doubling down on some of these companies. Furthermore, SPMO is not a broadly diversified momentum fund — although that’s not the point — but for an expense ratio of 0.13%, this ETF makes a compelling case for inclusion in many portfolios this year.
Dynamic Growth ETF Focused on the American Century: Strong and Non-Transparent Performance
American Century Focused Dynamic Growth ETF Today
US Dynamic Growth ETF
As of 01/17/2025 at 04:10 PM ET
- 52 week range
- $71.10
▼
$109.95
- Assets under management
- $7.01 million
The FDG fund returned 47.3% in the year leading up to January 15, 2025, a strong recommendation for the fund’s somewhat unusual approach. This ETF is what is called an opaque active fund, which means that the fund managers do not necessarily have to disclose their specific holdings on a regular basis as is the case for traditional ETFs. As an actively managed fund, it comes with a higher expense ratio than many of its passively managed peers – investors will spend 0.45% to hold FDG.
FDG’s mission is clear and straightforward: focus on mid- and large-cap U.S. companies with strong growth and profitability potential. As a relatively new fund (launched in 2020 after the SEC approved non-transparent active funds the previous year), it has a limited performance history. However, the fund’s performance in 2024 may be enough to entice some investors in the new year.
The Hartford Large Cap Growth ETF: A narrow basket of top U.S. names
Hartford Large Cap Growth ETF Today
Hartford Foundation for Large Business Growth
- Assets under management
- $127.00 million
HFGO is another actively managed fund that became fully transparent in July 2024. This ETF also has a simple guideline, looking for growth stocks with early signs of fundamentals accelerating. In practice, this means a portfolio heavily weighted in IT names and more broadly focused on large US companies. While holdings information is publicly available and regularly updated, the exact methodology behind the portfolio components section is less clear to outside investors.
With only 42 holdings as of January 15, 2025, the HFGO basket is highly concentrated. Its two largest players – Apple and NVIDIA, respectively – account for approximately 25% of invested assets. This makes HFGO a great choice 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%. That’s higher than many competitors, but the fund’s performance history may justify the larger fee. HFGO has returned 41.7% in the past year, as of January 15, 2025.
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