Best ETFs for September 2024

ETFs can help investors diversify their portfolio through a single investment product

Exchange-traded funds (ETFs) offer a way for investors to diversify their portfolios across different asset classes through a single investment product that can be bought and sold on an exchange like a stock. Top ETFs typically have a large asset base and lower operating costs. Investors can also use ETFs to mitigate investment risks and gauge the performance of an index, sector, or industry to make more informed investment decisions.

Key Takeaways

• Leading ETFs offer investors an opportunity to broadly diversify their holdings through a single investment with a low expense ratio and/or higher returns compared to competitors.
• We screened for the equity, bond, fixed income, commodities, and currency ETFs providing the highest one-month total returns for September 2024.
• These funds include XTL, GOVZ, LGOV, FGDL, FXY.

Below, we outline the top equity, bond, fixed income, commodities, and currency ETFs that generated the highest returns over the last month. We have excluded leveraged and inverse ETFs, as well as funds with less than $50 million in assets under management (AUM).

All data are current as of Aug. 15, 2024.

Equity ETF with the Best 1-Month Return: SPDR S&P Telecom ETF (XTL)

• One-month performance: 13.7%
• Expense Ratio: 0.35%
• Annual Dividend Yield: 0.73%
• 30-Day Average Daily Volume: 12,629
• AUM: $77.2 million
• Inception Date: Jan. 26, 2011
• Issuer: State Street

The SPDR S&P Telecom ETF invests in companies within the telecommunications industry, including wireless services and communication equipment. It aims to provide balanced exposure across large, mid, and small-cap stocks, offering a way to invest specifically in telecom-related businesses rather than broader sectors.

Bond ETF with the Best 1-Month Return: iShares 25+ Year Treasury STRIPS Bond ETF (GOVZ)

• One-month performance: 5.38%
• Expense ratio: 0.10%
• Annual dividend yield: 3.83%
• 30-day average daily volume: 684,033
• AUM: $350 million
• Inception date: Sept. 22, 2020
• Issuer: BlackRock Inc.

GOVZ seeks to track an index composed primarily of STRIP bonds of remaining maturities of at least 25 years. The ETF has made strong gains in response to the prospect of interest rate cuts from the U.S. Federal Reserve.

Fixed Income ETF with the Best 1-Month Return: First Trust Long Duration Opportunities ETF (LGOV)

• One-month performance: 3.21%      
• Expense ratio: 0.67%        
• Annual dividend yield: 3.94%
• 30-day average daily volume: 262,295
• AUM: Approximately $551.7 million
• Inception date: Jan. 22, 2019
• Issuer: First Trust

LGOV primarily invests in high-quality U.S. government debt and related securities, including mortgage-backed securities and other ETFs that focus on similar assets. As of July 31, LGOV held 47% of its portfolio in collateralized mortgage obligations (CMOs) and 21% in U.S. Treasuries.

Commodities ETF with the Best 1-Month Return: Franklin Responsibly Sourced Gold ETF (FGDL)

• One-month performance: 2%       
• Expense ratio: 0.15%
• Annual dividend yield: N/A
• 30-day average daily volume: 6,792
• AUM: $75.9 million
• Inception date: June 30, 2022
• Issuer: Franklin Templeton

This fund aims to track the price of gold, minus expenses, by offering a low-cost, easy way to invest in responsibly sourced gold from trusted refiners, providing diversification from traditional stocks and bonds. Gold prices have seen a strong rally in 2024 due to heightened geopolitical risk and heightened expectations the Fed will begin lowering interest rates.

Currency ETF with the Best 1-Month Return: Invesco Currencyshares Japanese Yen Trust (FXY)

• One-month performance: 5.83%   
• Expense ratio: 0.40%
• Annual dividend yield: N/A
• 30-day average daily volume: 267,087
• AUM: $374.2 million
• Inception date: Feb. 21, 2007
• Issuer: Invesco

FXY holds Japanese Yen and issues shares that track the value of the Yen in U.S. dollars. Investors can buy and sell these shares on the open market, like any other stock, to gain exposure to the Japanese Yen. The Yen has appreciated against the U.S. dollar due to recent interest rate hikes from the Bank of Japan as it looks to normalize monetary policy.

How We Chose the Best ETFs

We selected the best ETFs across five areas of focus (equities, bonds, fixed-income, commodities, and currencies) utilizing a screener by VettaFi. In each case, we sorted ETFs according to the specified category and ranked them by highest one-month returns. We then filtered out any ETFs employing a leveraged or inverse strategy, as well as any with under $50 million in AUM. Finally, for currencies ETFs, we excluded any funds focused on cryptocurrencies from our screen.

How to Invest in ETFs

Investors can buy and sell shares of ETFs in the same way they make traditional stock trades. Most brokerages provide access to a broad spectrum of ETFs. To begin, create and fund a brokerage account, then determine which ETFs you may be interested in purchasing. Follow the steps to initiate a buy through your particular brokerage. In most cases, it’s as easy as that.

The Bottom Line

Exchange-traded funds offer investors access to an entire professionally managed portfolio of holdings with a single transaction. Their ability to diversify and simplify a retail investor’s investing process is widely regarded. One metric that investors often look to is trailing one-month performance.

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As of the date this article was written, the author does not own any of the above ETFs.

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