Three ETFs Poised to Break Out Boosted by Tech, Global Trends

Investors on the lookout for potential break out candidates among ETFs can look for a few key factors in charts, global trends, and momentum. Trends, too, can guide investors and advisors to ETFs able to break out. Perhaps one of the biggest factors to consider, however, are milestones. When ETFs hit their three year ETF milestones, they have three year track records that get them in front of more potential investors. Here are three funds that may combine enough of those factors together.

1. The Aztlan North America Nearshoring Stock Selection ETF (NRSH) 

NRSH offers exposure to nearshoring as a trend, which was already picking up interest even prior to tariff increases. The fund charges a 76 basis point (bps) fee to track an index of the same name. Specifically, that index applies a liquidity weighting approach, using a multi-factor model in industrial real estate and logistics sectors. NRSH invests in U.S., Canada, and Mexico-based firms. 

The ETF selects 30 names with a proprietary model emphasizing cash flow, value, growth, and quality. That has helped the fund return 47.9% YTD according to ETF Database data. It has also returned 58.1% over the last twelve months. The fund hits its three year ETF anniversary in November.

2. The Xtrackers Semiconductor Select Equity ETF (CHPS)

CHPS charges a 15 bps fee to track the Solactive Semiconductor ESG index. The fund will celebrate its three year ETF anniversary in July, in the midst of a very strong year for returns. The ETF has returned 108% YTD according to ETF Database data. CHPS’ index provides a market cap-weighted approach to semiconductor firms that meet eligibility requirements about size, trading, and liquidity. 

Together that has helped the small, rising ETF to its strong performance. Semiconductors of course remain a critical, red hot category for investors right now, and CHPS’ upstart status could make it one to watch. 

3. Putnam Emerging Markets ex-China ETF (PEMX)

Finally, PEMX charges a 69 bps fee to actively invest in ex-China emerging markets. Where NRSH offers exposure to one important trend, PEMX offers diversification away from expensive, concentrated U.S. stocks as well as concerns around China’s slowing growth. The strategy has been red hot YTD, returning 40.4% in that time per ETF Database data.

PEMX takes an active approach, actively investing in emerging markets with fundamental research. Its high conviction approach applies both qualitative and quantitative analysis, looking at high quality firms that combine mispricing and potential growth. The ETF’s managers also look at financials, market structure, valuations, industry position, projected earnings, and other factors. The fund just recently hit its three year anniversary last month.

All three of those ETFs have stood out this year and with six more months to go, they could continue to appeal. For those looking for funds that may play a bigger role this year, this trio can intrigue.

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