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Top 4 Large-Cap ETFs for 2020

Depending on who you ask, large-cap stocks have a market capitalization above $5 billion, $8 billion, or $10 billion. Regardless of the cap cutoff you choose, large caps are definitely the biggest fish in the equities pond. When you think of most household names, chances are good that they’re large caps. Apple Inc. (AAPL), Microsoft Corporation (MSFT), and The Coca-Cola Company (KO) are all considered large-cap stocks, to name a few.

Large-cap stocks are generally considered good bets for long-term investment strategies and hold many advantages. This is particularly true for buy-and-hold investors who are looking for stability that is often sweetened with a dose of dividend yield to balance the portfolio. Because of their size, large caps are less likely to succumb to economic pressures and conditions that can interrupt operations and drive down profits for smaller organizations.

If you’re looking for some large-cap exposure for your IRA or another investment account in 2020 and beyond, exchange-traded funds (ETFs) offer a great alternative to choosing individual equities. ETFs are generally cheap to own and have high liquidity, making them suitable for any type of investor.

In 2020, a number of factors are helping to fuel gains in technology and growth stocks, which make up a good portion of large-cap stocks. Catalysts include e-commerce, cloud computing, artificial intelligence, an improving economy, and the passing of U.S. tax reform. Speculators believe savings from tax reform could help tech and growth companies to invest tax savings on greater research and development.

Here are four of the best performing large-cap ETFs for your portfolio, based on 2020 returns to-date.

1. ARK Next Generation Internet ETF (ARKW)

  • One-Year Return: 117.33%
  • Price: $122.72
  • 12-Month Yield: 0.00%
  • Average Volume: 3,300
  • Assets under Management: $3.2 billion
  • Expense Ratio: 0.76%

For the one-year period through Sep. 30, 2020, the ARK Next Generation Internet ETF (ARKW) reported a return of 139.63%. This five-star Morningstar fund is a large one, with $3.2 billion total assets under management and at the top of our list. Having doubled its value, the fund has 48 equity holdings with the largest portion of stocks allocated to Internet software and communications services at 69.43%. As of Sep. 30, 2020, the fund’s top holdings were Tesla, Roku, and Square Inc.

2. O’Shares Global Internet Giants ETF (OGIG)

  • Year to Date Return: 92.62%
  • Price: $49.36
  • 12-Month Yield: 0.00%
  • Average Volume: 226,800
  • Assets under Management: $537.2 million
  • Expense Ratio: 0.48%

The O’Shares Global Internet Giants ETF (OGIG) had a one-year return of 110.53% as of Nov. 6, 2020. The fund heavily invests in some of the largest global companies in the Internet and e-commerce spaces, that exhibit growth potential. A relatively new fund, the O’Shares Global Internet Giants ETF was started in June of 2018 and has 71 equity holdings. The top holdings in the fund are Amazon, Alibaba, and Tencent Holdings.

3. ARK Fintech Innovation ETF (ARKF)

  • Year to Date Return: 90.12%
  • Price: $44.90
  • 12-Month Yield: 0.00%
  • Average Volume: 4,200
  • Assets under Management: $1 billion
  • Expense Ratio: 0.75%

The ARK Fintech Innovation ETF (ARKF) is a fund all about companies engaged in financial technology, which it defines as “the introduction of a technologically enabled new product or service that potentially changes the way the financial sector works.” This includes financial transactions, blockchain, risk, and funding platforms among others.

ARKF maintains a balance between American and non-U.S. equities in its portfolio, with about 37.64% in foreign equities. Even despite the recession in 2020 and its recent beginning as a fund in February 2019, ARKF brought 90.12% in returns in 2020. The fund is top-heavy, holding 48% of its assets in its top 10 holdings, which include Square, MercadoLibre, Zillo, Pinterest, and Tencent Holdings among others.

4. Renaissance IPO ETF (IPO)

  • Year to Date Return: 83.44%
  • Price: $56.25
  • 12-Month Yield: 0.26%
  • Average Volume: 216,800
  • Assets under Management: $360.4 million
  • Expense Ratio: 0.60%

The Renaissance IPO ETF (IPO) is a four-star Morningstar fund that has boasted a one-year return of 94.99%. This fund is not for the faint of heart: with a reported turnover of 92%, its strategy is to get exposure to the newest publicly-listed U.S. companies and remove any that have been public for two years already. With 56% of its assets in its top 10 holdings, IPO has heavily benefited from the returns from its top investments in companies including Zoom, Uber, Pinterest, CrowdStrike, and Moderna.

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