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 the first quarter of 2024, the top-performing stock ETFs included mid-cap blend funds Invesco S&P MidCap Quality ETF XMHQ and mid-cap growth fund Invesco S&P MidCap 400 Pure Growth ETF RFG. The worst performers included ARK Innovation ETF ARKK and ARK Space Exploration & Innovation ETF ARKX. Data in this article is sourced from Morningstar Direct.
Screening for the Best- and Worst-Performing ETFs
To find the quarter’s best- and worst-performing stock ETFs, we screened the ones in the Morningstar US Equity category that trade within the United States. We excluded exchange-traded notes, known as ETNs, and ETFs with less than $100 million in total assets.
Within our list, three funds fell into the large growth category, where the average name rose 11.9% in the first quarter.
Among the worst-performing ETFs, three were from the small value category, where funds gained 4.7% in the first quarter.
Returns for the best- and worst-performing ETFs ranged from 24.4% to negative 4.5%, a gap of 28.8 percentage points.
The 10 Best-Performing ETFs for Q1 2024:
- Invesco S&P MidCap Quality ETF XMHQ
- Invesco S&P MidCap 400 Pure Growth ETF RFG
- Invesco S&P MidCap 400 GARP ETF GRPM
- Invesco S&P 500 Momentum ETF SPMO
- TCW Transform Systems ETF NETZ
- Alpha Architect US Quantitative Momentum ETF QMOM
- Direxion HCM Tactical Enhanced US Equity Strategy ETF HCMT
- American Century Focused Dynamic Growth ETF FDG
- Fidelity Blue Chip Growth ETF FBCG
- Return Stacked US Stocks & Managed Futures ETF RSST
The 10 Worst-Performing ETFs for Q1 2024:
- ARK Innovation ETF ARKK
- ARK Space Exploration & Innovation ETF ARKX
- Invesco Russell 2000 Dynamic Multifactor ETF OMFS
- ProShares Russell 2000 Dividend Growers ETF SMDV
- SPDR SSGA US Small Cap Low Volatility Index ETF SMLV
- First Trust Small Cap Value AlphaDEX ETF FYT
- Harbor Human Capital Factor US Small Cap ETF HAPS
- Invesco S&P SmallCap 600 Pure Value ETF RZV
- Invesco S&P SmallCap Low Volatility ETF XSLV
- VictoryShares US Small Cap High Dividend Volatility Weighted ETF CSB
Metrics for the Best-Performing Stock ETFs
Best-Performing ETFs in the US
Invesco S&P MidCap Quality ETF
- Morningstar Rating: 5 stars
- Expense Ratio: 0.25%
- Morningstar Category: Mid-Cap Blend
The $4.5 billion Invesco S&P MidCap Quality ETF was the best-performing ETF in the first quarter, with a 24.4% return. The return on the passively managed Invesco ETF topped the 9.2% gain on the average fund in Morningstar’s mid-cap blend category for the quarter. Over the last 12 months, the Invesco S&P MidCap Quality ETF has returned 50.9%, outperforming the 22.5% gain on the average fund in its category, leaving the ETF in the 1st percentile.
The Invesco S&P MidCap Quality ETF has a Morningstar Medalist Rating of Silver. It was launched in December 2006.
Invesco S&P MidCap 400 Pure Growth ETF
- Morningstar Rating: 2 stars
- Expense Ratio: 0.35%
- Morningstar Category: Mid-Cap Growth
The second-best-performing ETF in the first quarter was the $328 million Invesco S&P MidCap 400 Pure Growth ETF. The passively managed Invesco ETF returned 23%, outperforming the average mid-cap growth fund, which gained 9.4%. Looking back over the last 12 months, the Invesco S&P MidCap 400 Pure Growth ETF has returned 39.5%, outperforming the 23% return on the average fund in its category, leaving the ETF in the 3rd percentile.
The Invesco S&P MidCap 400 Pure Growth ETF has a Negative Morningstar Medalist Rating, meaning our analysts expect it to be one of the worst performers within its category and think it is unlikely to deliver positive returns after fees.
Invesco S&P MidCap 400 GARP ETF
- Morningstar Rating: 5 stars
- Expense Ratio: 0.35%
- Morningstar Category: Small Blend
The $387 million Invesco S&P MidCap 400 GARP ETF ranked third for the quarter, returning 22.6%. The Invesco ETF, which is passively managed, topped the 5.7% average return on funds in the small blend category for the first quarter. Over the last 12 months, the Invesco ETF has returned 39.6%, ahead of the 18.9% gain on the average fund in its category, leaving the ETF in the 1st percentile.
The Invesco S&P MidCap 400 GARP ETF, launched in December 2010, has a Morningstar Medalist Rating of Bronze.
Invesco S&P 500 Momentum ETF
- Morningstar Rating: 4 stars
- Expense Ratio: 0.13%
- Morningstar Category: Large Growth
With a 22.5% return, the $1.2 billion Invesco S&P 500 Momentum ETF ranked fourth in the quarter. The passively managed Invesco ETF outperformed the 11.9% return on the average large growth fund. Over the last 12 months, the fund has gained 48.8%, ahead of the 36.5% return on funds in its category, placing it in the 3rd percentile.
The Invesco S&P 500 Momentum ETF has a Bronze Morningstar Medalist Rating. It was launched in October 2015.
TCW Transform Systems ETF
- Morningstar Rating: N/A
- Expense Ratio: 0.75%
- Morningstar Category: Large Blend
The fifth-best-performing ETF was the $133 million TCW Transform Systems ETF, which gained 20.5% in the first quarter. This actively managed TCW ETF beat the 10% average return on funds in the large blend category. Over the past year, the TCW Transform Systems ETF rose 38.4%, outperforming the 27.2% return on the average fund in its category and placing it in the 3rd percentile.
The TCW Transform Systems ETF considers environmental, social, and governance criteria. This fund has a Morningstar Medalist Rating of Neutral.
Alpha Architect US Quantitative Momentum ETF
- Morningstar Rating: 4 stars
- Expense Ratio: 0.29%
- Morningstar Category: Mid-Cap Growth
The $210 million Alpha Architect US Quantitative Momentum ETF was the sixth-best-performing US ETF in the first quarter, with an 18.5% return. The return on the actively managed Alpha Architect ETF topped the 9.4% gain on the average fund in Morningstar’s mid-cap growth category. Looking back over the last 12 months, the Alpha Architect US Quantitative Momentum ETF has returned 32%, outperforming the 23% return on the average fund in its category, leaving the ETF in the 8th percentile.
The Neutral-rated Alpha Architect US Quantitative Momentum ETF was launched in December 2015.
Direxion HCM Tactical Enhanced US Equity Strategy ETF
- Morningstar Rating: N/A
- Expense Ratio: 1.17%
- Morningstar Category: Large Blend
The seventh-best-performing ETF in the first quarter was the $287 million Direxion HCM Tactical Enhanced US Equity Strategy ETF. The actively managed Direxion ETF returned 16%, outperforming the average large blend fund, which gained 10%. The fund was launched in June 2023 and thus does not have a one-year track record.
The Direxion HCM Tactical Enhanced US Equity Strategy ETF has a Morningstar Medalist Rating of Neutral.
American Century Focused Dynamic Growth ETF
- Morningstar Rating: 2 stars
- Expense Ratio: 0.45%
- Morningstar Category: Large Growth
The $212 million American Century Focused Dynamic Growth ETF ranked eighth for the quarter, returning 15.8%. The American Century ETF, which is actively managed, topped the 11.9% average gain on funds in the large growth category. Over the last 12 months, the American Century ETF has returned 40.8%, ahead of the 36.5% return on the average fund in its category, leaving it in the 31st percentile.
The Bronze-rated American Century Focused Dynamic Growth ETF was launched in March 2020.
Fidelity Blue Chip Growth ETF
- Morningstar Rating: 2 stars
- Expense Ratio: 0.59%
- Morningstar Category: Large Growth
With a 15.8% gain, the $1.4 billion Fidelity Blue Chip Growth ETF ranked ninth in the first quarter. The actively managed Fidelity ETF outperformed the 11.9% return on the average large growth fund. Over the last 12 months, the fund has returned 51.3%, ahead of the 36.5% return on funds in its category, placing it in the 1st percentile.
The Fidelity Blue Chip Growth ETF, launched in June 2020, has a Morningstar Medalist Rating of Silver.
Return Stacked US Stocks & Managed Futures ETF
- Morningstar Rating: N/A
- Expense Ratio: 1.04%
- Morningstar Category: Large Blend
The tenth-best-performing ETF was the $107 million Return Stacked US Stocks & Managed Futures ETF, which gained 15.8% in the first quarter. The actively managed Newfound ETF beat the 10% average return on funds in the large blend category. The fund was launched in September 2023 and does not have a one-year track record.
The Return Stacked US Stocks & Managed Futures ETF has a Morningstar Medalist Rating of Negative.
Metrics for the Worst-Performing Stock ETFs
Worst-Performing ETFs in the US
ARK Innovation ETF
- Morningstar Rating: 1 star
- Expense Ratio: 0.75%
- Morningstar Category: Mid-Cap Growth
The worst-performing ETF in the first quarter was the $7.6 billion ARK Innovation ETF, which lost 4.5%. The actively managed ARK ETF underperformed the average 9.4% gain on funds in the mid-cap growth category. Over the past 12 months, the ARK Innovation ETF rose 24.2%, placing it in the 44th percentile within its category and outperforming the 23% return on the average fund.
The ARK Innovation ETF, launched in October 2014, has a Morningstar Medalist Rating of Negative.
ARK Space Exploration & Innovation ETF
- Morningstar Rating: N/A
- Expense Ratio: 0.75%
- Morningstar Category: Mid-Cap Growth
With a 2.6% loss, the $243 million ARK Space Exploration & Innovation ETF was the second-worst-performing ETF on our list for the first quarter. The actively managed ARK ETF underperformed the average 9.4% gain on funds in the mid-cap growth category. Over the past 12 months, the ARK Space Exploration & Innovation ETF gained 7.2%, placing it in the 98th percentile within its category and underperforming the 23% return on the average fund.
The Neutral-rated ARK Space Exploration & Innovation ETF was launched in March 2021.
Invesco Russell 2000 Dynamic Multifactor ETF
- Morningstar Rating: 3 stars
- Expense Ratio: 0.39%
- Morningstar Category: Small Blend
The third-worst-performing ETF in the first quarter was the $378 million Invesco Russell 2000 Dynamic Multifactor ETF, which fell 2.4%. The Invesco ETF, which is passively managed, underperformed the average 5.7% gain on funds in the small blend category. Over the past 12 months, the ETF rose 9.1% to place in the 95th percentile within its category, underperforming the category’s average 1-year return of 18.9%.
The Invesco Russell 2000 Dynamic Multifactor ETF has a Morningstar Medalist Rating of Silver. It was launched in November 2017.
ProShares Russell 2000 Dividend Growers ETF
- Morningstar Rating: 2 stars
- Expense Ratio: 0.40%
- Morningstar Category: Small Blend
The $775 million ProShares Russell 2000 Dividend Growers ETF was the fourth-worst-performing ETF in the first quarter, with a loss of 0.9%. The passively managed ProShares ETF performed worse than the average 5.7% gain on funds in the small blend category. Over the past year, the ETF gained 7.9% to land in the 96th percentile within its category, underperforming the category’s average one-year return of 18.9%.
The Negative-rated ProShares Russell 2000 Dividend Growers ETF was launched in February 2015.
SPDR SSGA US Small Cap Low Volatility Index ETF
- Morningstar Rating: 3 stars
- Expense Ratio: 0.12%
- Morningstar Category: Small Blend
Fifth-worst was the $182 million SPDR SSGA US Small Cap Low Volatility Index ETF, which gained 0.1% in the first quarter. The passively managed State Street ETF fell short of the average 5.7% return on funds in the small blend category. Over the past year, the SPDR SSGA US Small Cap Low Volatility Index ETF rose 9.2%, finishing in the 95th percentile within its category. It underperformed the category’s average one-year return of 18.9%.
The SPDR SSGA US Small Cap Low Volatility Index ETF has a Morningstar Medalist Rating of Silver. It was launched in February 2013.
First Trust Small Cap Value AlphaDEX ETF
- Morningstar Rating: 2 stars
- Expense Ratio: 0.70%
- Morningstar Category: Small Value
The sixth-worst-performing ETF in the first quarter was the $194 million First Trust Small Cap Value AlphaDEX ETF, which gained 0.3%. The passively managed First Trust ETF underperformed the average 4.7% gain on funds in the small value category. Over the past 12 months, the First Trust Small Cap Value AlphaDEX ETF rose 21.1%, placing it in the 43rd percentile within its category and outperforming the 20.1% return on the average fund.
The First Trust Small Cap Value AlphaDEX ETF has a Morningstar Medalist Rating of Bronze. It was launched in April 2011.
Harbor Human Capital Factor US Small Cap ETF
- Morningstar Rating: N/A
- Expense Ratio: 0.60%
- Morningstar Category: Small Blend
With a 0.3% gain, the $127 million Harbor Human Capital Factor US Small Cap ETF was the seventh-worst-performing ETF on our list for the first quarter. The passively managed Harbor ETF underperformed the average 5.7% gain on funds in the small blend category. The fund launched in April 2023 and does not have a one-year track record.
The Harbor Human Capital Factor US Small Cap ETF has a Morningstar Medalist Rating of Neutral.
Invesco S&P SmallCap 600 Pure Value ETF
- Morningstar Rating: 2 stars
- Expense Ratio: 0.35%
- Morningstar Category: Small Value
The eighth-worst-performing ETF in the first quarter was the $246 million Invesco S&P SmallCap 600 Pure Value ETF, which rose 0.7%. The Invesco ETF, which is passively managed, underperformed the average 4.7% gain on funds in the small value category. Over the past 12 months, the ETF rose 20.1% to place in the 50th percentile within its category, roughly in line with the average one-year return of 20.1%.
The Invesco S&P SmallCap 600 Pure Value ETF, launched in March 2006, has a Morningstar Medalist Rating of Neutral.
Invesco S&P SmallCap Low Volatility ETF
- Morningstar Rating: 2 stars
- Expense Ratio: 0.25%
- Morningstar Category: Small Blend
The $342 million Invesco S&P SmallCap Low Volatility ETF was the ninth-worst-performing ETF in the first quarter, with a return of 0.8%. The passively managed Invesco ETF performed worse than the average 5.7% gain on funds in the small blend category. Over the past year, the ETF gained 6.7% to land in the 98th percentile, underperforming the category’s average one-year return of 18.9%.
The Invesco S&P SmallCap Low Volatility ETF has a Morningstar Medalist Rating of Neutral. It was launched in February 2013.
VictoryShares US Small Cap High Dividend Volatility Weighted ETF
- Morningstar Rating: 3 stars
- Expense Ratio: 0.35%
- Morningstar Category: Small Value
Tenth-worst was the $322 million VictoryShares US Small Cap High Dividend Volatility Weighted ETF, which gained 1% in the first quarter. The passively managed Victory Capital ETF underperformed the average 4.7% return on funds in the small value category for the quarter. Over the past year, the VictoryShares US Small Cap High Dividend Volatility Weighted ETF rose 12.3%, finishing the 12 months in the 91st percentile within the small value category. It underperformed the category’s average one-year return of 20.1%.
The Neutral-rated VictoryShares US Small Cap High Dividend Volatility Weighted ETF was launched in July 2015.
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.
As part of our mission to put more information into the hands of investors, this article was compiled from Morningstar’s data and independent research using automation technology. The original article was written by Morningstar reporters and editors. This updated version was reviewed by an editor.
The author or authors do not own shares in any securities mentioned in this article.Find out about Morningstar’s editorial policies.
