Stock exchange-traded funds, or equity ETFs, are often low-cost, tax-efficient instruments for investors to track popular indexes or leverage experienced manager choices to beat the market. The best ones serve as low-cost building blocks in a portfolio, and unlike open-end mutual funds, all ETFs are traded throughout the day on an exchange.
In May 2024, the top-performing stock ETFs included large-blend fund Direxion HCM Tactical Enhanced US Equity Strategy ETF HCMT and large-growth fund HCM Defender 100 Index ETF QQH. Data in this article is sourced from Morningstar Direct.
Screening for the Best-Performing ETFs
To find the month’s best-performing stock ETFs, we screened the Morningstar US Equity category for those that trade within the United States. We excluded exchange-traded notes and ETFs with less than $100 million in total assets. Within our list, seven funds fell into the large-growth category, where the average name rose 4.92% in May.
The 10 Best-Performing ETFs for May 2024
- Direxion HCM Tactical Enhanced US Equity Strategy ETF HCMT
- HCM Defender 100 Index ETF QQH
- Fidelity Blue Chip Growth ETF FBCG
- Invesco S&P 500 Momentum ETF SPMO
- Invesco S&P SmallCap Momentum ETF XSMO
- Fidelity Nasdaq Composite Index ETF ONEQ
- HCM Defender 500 Index ETF LGH
- T. Rowe Price Blue Chip Growth ETF TCHP
- iShares Russell Top 200 Growth ETF IWY
- WisdomTree US Quality Growth Fund QGRW
Metrics for the Best-Performing Stock ETFs
Direxion HCM Tactical Enhanced US Equity Strategy ETF
The $309 million Direxion HCM Tactical Enhanced US Equity Strategy ETF was the best-performing ETF in May, with a 10.21% return. The actively managed Direxion ETF beat the 4.24% gain on the average fund in Morningstar’s large-blend category for the month. The fund was first launched in June 2023, and as a result, it does not have a one-year track record.
The Direxion HCM Tactical Enhanced US Equity Strategy ETF has a Morningstar Medalist Rating of Neutral.
HCM Defender 100 Index ETF
- Morningstar Rating: 3 stars
- Expense Ratio: 0.96%
- Morningstar Category: Large Growth
The second-best-performing ETF in May was the $451 million HCM Defender 100 Index ETF. The passively managed Howard Capital Management ETF returned 9.13%, outperforming the average large-growth fund, which gained 4.92%. Looking back over the last 12 months, the HCM Defender 100 Index ETF has returned 30.18%, roughly in line with the 30.96% return on the average fund in its category, leaving it in the 61st percentile.
The Bronze-rated HCM Defender 100 Index ETF was launched in October 2019.
Fidelity Blue Chip Growth ETF
- Morningstar Rating: 3 stars
- Expense Ratio: 0.59%
- Morningstar Category: Large Growth
The $2 billion Fidelity Blue Chip Growth ETF ranked third for the month, returning 7.85%. The Fidelity ETF, which is actively managed, topped the 4.92% average return on funds in the large growth category for May. Over the last 12 months, the Fidelity ETF has returned 44.91%, ahead of the 30.96% gain on the average fund in its category, leaving it in the 2nd percentile.
The Fidelity Blue Chip Growth ETF, launched in June 2020, has a Morningstar Medalist Rating of Silver.
Invesco S&P 500 Momentum ETF
- Morningstar Rating: 5 stars
- Expense Ratio: 0.13%
- Morningstar Category: Large Growth
With a 7.12% return, the $1.5 billion Invesco S&P 500 Momentum ETF ranked fourth in May. The passively managed Invesco ETF outperformed the 4.92% return on the average large-growth fund. Over the last 12 months, the fund has gained 55.31%, ahead of the 30.96% return on funds in its category, placing it in the 1st percentile.
The Invesco S&P 500 Momentum ETF has a Bronze Morningstar Medalist Rating. It was launched in October 2015.
Invesco S&P SmallCap Momentum ETF
- Morningstar Rating: 5 stars
- Expense Ratio: 0.39%
- Morningstar Category: Small Growth
The fifth-best-performing ETF was the $684 million Invesco S&P SmallCap Momentum ETF, which gained 7.10% in May. This passively managed Invesco ETF beat the 4.65% average return on funds in the small-growth category. Over the past year, the Invesco S&P SmallCap Momentum ETF rose 40.25%, outperforming the 18.22% return on the average fund in its category and placing it in the 1st percentile.
The Invesco S&P SmallCap Momentum ETF, launched in March 2005, has a Morningstar Medalist Rating of Silver.
Fidelity Nasdaq Composite Index ETF
- Morningstar Rating: 4 stars
- Expense Ratio: 0.21%
- Morningstar Category: Large Growth
The $6.3 billion Fidelity Nasdaq Composite Index ETF was the sixth-best-performing US ETF in May, with a 6.96% return. The return on the passively managed Fidelity ETF topped the 4.92% gain on the average fund in Morningstar’s large-growth category. Looking back over the last 12 months, the Fidelity Nasdaq Composite Index ETF has returned 30.78%, roughly in line with the 30.96% return on the average fund in its category, leaving it in the 56th percentile.
The Gold-rated Fidelity Nasdaq Composite Index ETF was launched in September 2003.
HCM Defender 500 Index ETF
- Morningstar Rating: 2 stars
- Expense Ratio: 0.98%
- Morningstar Category: Large Blend
The seventh-best-performing ETF in May was the $379 million HCM Defender 500 Index ETF. The passively managed Howard Capital Management ETF returned 6.90%, outperforming the average large-blend fund, which gained 4.24%. Looking back over the last 12 months, the HCM Defender 500 Index ETF has returned 30.65%, outperforming the 25.88% return on the average fund in its category, leaving it in the 14th percentile.
The HCM Defender 500 Index ETF has a Morningstar Medalist Rating of Bronze. It was launched in October 2019.
T. Rowe Price Blue Chip Growth ETF
- Morningstar Rating: 2 stars
- Expense Ratio: 0.57%
- Morningstar Category: Large Growth
The $599 million T. Rowe Price Blue Chip Growth ETF ranked eighth for the month, returning 6.81%. The T. Rowe Price ETF, which is actively managed, topped the 4.92% average gain on funds in the large-growth category. Over the last 12 months, the T. Rowe Price ETF has returned 37.93%, ahead of the 30.96% return on the average fund in its category, leaving it in the 11th percentile.
The Silver-rated T. Rowe Price Blue Chip Growth ETF was launched in August 2020.
iShares Russell Top 200 Growth ETF
- Morningstar Rating: 5 stars
- Expense Ratio: 0.20%
- Morningstar Category: Large Growth
With a 6.67% gain, the $10.2 billion iShares Russell Top 200 Growth ETF ranked ninth in May. The passively managed iShares ETF outperformed the 4.92% return on the average large-growth fund. Over the last 12 months, the fund has returned 35.22%, ahead of the 30.96% return on funds in its category, placing it in the 27th percentile.
The iShares Russell Top 200 Growth ETF, launched in September 2009, has a Morningstar Medalist Rating of Silver.
WisdomTree US Quality Growth Fund
- Morningstar Rating: N/A
- Expense Ratio: 0.28%
- Morningstar Category: Large Growth
The tenth-best-performing ETF was the $390 million WisdomTree US Quality Growth Fund, which gained 6.67% in May. The passively managed WisdomTree ETF beat the 4.92% average return on funds in the large-growth category. Over the past year, the WisdomTree US Quality Growth Fund rose 35.88%, outperforming the 30.96% return on the average fund in its category and placing it in the 21st percentile.
The WisdomTree US Quality Growth Fund has a Morningstar Medalist Rating of Gold. It was launched in December 2022.
What Are ETFs?
Exchange-traded funds are investments that trade throughout the day on stock exchanges, much like individual stocks. They differ from traditional mutual funds—known as open-end funds—which can only be bought or sold at a single price each day. Historically, ETFs have tracked indexes, but in recent years, more ETFs have been actively managed. ETFs cover a range of asset classes, including stocks, bonds, commodities, and most recently cryptocurrency.
ETFs offer investors an efficient way to gain exposure to the markets, often with low fees and ease of buying and selling. They also generally offer higher tax efficiency than open-end funds.
The Best Stock ETFs: More Ideas to Consider
Investors who would like to find more of the top-performing or cheapest ETFs can do the following:
- Read Morningstar’s guide to ETF investing.
- Explore the best ETFs and how they fit into your portfolio.
- Review the full list of US Stock ETFs. Funds with at least 70% of assets in US stocks are placed within the US equity categories.
- Use the Morningstar Investor Screener tool to find the best ETFs according to your specific criteria. You can search for funds based on their fees, Morningstar Medalist Ratings, manager tenures, and more.
- Use Morningstar Investor to build a watchlist of the best ETFs and easily follow their valuations, ratings, and fees.
- Watch our ETF video series, hosted by Daniel Sotiroff, for ideas to consider.
This article was compiled by Bella Albrecht and edited by Lauren Solberg.
This article was generated with the help of automation and reviewed by Morningstar editors.
Learn more about Morningstar’s use of automation.
