Best Performing ETFs of 2022

Best Performing ETFs of 2022

Energy ETFs dominated 2022’s top funds.

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Reviewed by: Heather Bell
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Edited by: Heather Bell

If you guessed at the start of the year—before war, inflation and rate hikes—which funds would turn in the best annual performance, maybe you would have said broad stock indexes, real estate or bonds. 

You would have been wrong. 

The top-performing ETF of 2022, once you filter out leveraged and inverse products, was the $424.2 million iShares MSCI Turkey ETF (TUR) with a monster return of 104% through Dec. 27.  

Turkey’s lira plummeted during the year while inflation soared as high as 80%. However, that was what drove the stock market’s outstanding performance, as domestic investors plowed in assets to hedge against skyrocketing prices.  

Despite its outsized returns, U.S. investors aren’t taking the bait, and the fund has seen $82.8 million in outflows year-to-date. Indeed, a recent Bloomberg article notes that foreign ownership of Turkish stocks hit record lows.  

The runner up to TUR is the $375.9 million Simplify Interest Rate Hedge ETF (PFIX), which rolled out in May 2021. The fund is designed to provide a hedge against sharp increases in interest rates, which it does by holding U.S. Treasury securities and U.S. Treasury Inflation Protected Securities in conjunction with interest rate options. PFIX is up 93% this year, and unlike TUR, it has seen inflows to the tune of $123.3 million. 

Energy All the Way Down 

From PFIX on down, the top performers are energy related with one exception. The $2.6 billion VanEck Oil Services ETF (OIH) was in the No. 3 spot with a gain of 66%, followed by the $40.7 billion Energy Select Sector SPDR Fund (XLE) with a return of 65%.  

Ultimately the remaining energy funds in the top 20 ETFs in terms of returns were up anywhere from 49% (the Invesco DWA Energy Momentum ETF (PXI)) to 65% (the iShares U.S. Oil Equipment & Services ETF (IEZ)). Almost all of those were equity funds; however, the United States 12-Month Natural Gas Fund LP (UNL) was in the mix with a return of 57%. The fund invests in natural gas futures via a laddered strategy that maintains equal-weight exposure to the 12 nearest-month NYMEX natural gas futures.  

According to data from the Bureau of Labor Statistics, energy costs for Americans saw an average increase of 13% year-over-year as of November.  

Nickel Another Outlier 

Nestled in the No. 19 spot for returns is the $43.7 million iPath Series B Bloomberg Nickel Subindex Total Return ETN (JJN) with a return of 50%. The ETN, which tracks the price of nickel futures, saw a sharp spike back in early March before falling almost as dramatically, but it climbed fairly steadily during the final quarter. Demand for nickel has seen an increase largely due to its use in batteries for electric vehicles, and that demand is expected to continue to grow over the next few years.  

 

FundTickerYTD Return
iShares MSCI Turkey ETFTUR104.0%
Simplify Interest Rate Hedge ETFPFIX93.0%
VanEck Oil Services ETFOIH66.0%
Energy Select Sector SPDR FundXLE65.2%
iShares U.S. Oil Equipment & Services ETFIEZ64.9%
Fidelity MSCI Energy Index ETFFENY64.4%
Vanguard Energy ETFVDE64.2%
Invesco Dynamic Energy Exploration & Production ETFPXE61.5%
Invesco Dynamic Oil & Gas Services ETFPXJ60.9%
Credit Suisse S&P MLP Index ETNMLPO60.6%
SPDR S&P Oil & Gas Equipment & Services ETFXES60.6%
iShares U.S. Energy ETFIYE60.2%
Invesco S&P 500 Equal Weight Energy ETFRYE59.7%
iShares U.S. Oil & Gas Exploration & Production ETFIEO58.8%
United States 12 Month Natural Gas Fund LPUNL57.1%
First Trust Natural Gas ETFFCG50.3%
First Trust Energy AlphaDEX FundFXN50.0%
iShares Global Energy ETFIXC49.6%
iPath Series B Bloomberg Nickel Subindex Total Return ETNJJN49.5%
Invesco DWA Energy Momentum ETFPXI49.5%

Source: FactSet, data as of Dec. 27, 2022 

 

Contact Heather Bell at [email protected] 

Heather Bell is a former managing editor of etf.com. She has also held editorial positions at Dow Jones Indexes and Lehman Brothers. Bell is a graduate of Dartmouth college and resides in the Denver area with her two dogs.