Tech stocks have dominated market gains in recent years. In fact, the S & P 500 Equal Weight Information Technology index has had a 12.5% annualized five-year return from July 2019 – widely outpacing other sectors such as consumer staples, energy and financials. Still, the tech sector faces an uncertain future. “We do not think the daily grind upward in the stock indexes is sustainable, largely amid the possibility of mixed earnings reports over the next few weeks and the possibility of yet another Fed rate hike,” said James Demmert, chief investment officer of Main Street Research, earlier this week before the U.S. Federal Reserve opted to raise interest rates . Look beyond tech But there are opportunities beyond tech: Morningstar data reveals the funds outside of tech and growth sectors that have also outperformed over the last five years. The following is a list of such U.S. dollar-denominated funds that had among the highest annualized return over the last five years — from July 2018 to the end of June this year — according to Morningstar data. Here are the funds and some of their top holdings: Luxembourg Selection Active Solar : The fund focuses on companies in the global solar energy sector. Its top holdings include SolarEdge, Sunrun, JinkoSolar, Canadian Solar and Enphase Energy. Fidelity Select Construction & Housing Portfolio : This fund invests in companies that design and construct residential, commercial and other facilities, or provide housing and construction products. Top holdings include Home Depot, Johnson Controls International, Floor & Décor and Trane Technologies. Guinness Atkinson Alternative Energy Fund : This fund picks companies in the alternative energy sector, with at least half of the business dedicated to renewable energy or energy efficiency. Top holdings include Schneider Electric, NextEra Energy and Eaton. Shelton Sustainable Equity Fund : This fund invests in stocks in the “sustainable economy,” such as those that make products that mitigate the effects of key environment and economic “systemic risks.” Top holdings include Darling Ingredients, which turns food waste into sustainable products, among other services; renewable energy firm Ormat; agribusiness firm Bunge; and medical and industrial products maker Danaher. Global X Lithium and Battery Tech ETF : The ETF comprises lithium producers and lithium battery makers — all essential to electric vehicles. Top holdings include Albemarle, Samsung SDI and CATL. First Trust RBA American Industrial Renaissance ETF : This ETF measures the performance of small and mid-cap U.S. companies in the industrial and community banking sectors. Top holdings include Hubbell, MasTec, SPX Technologies and Sterling Infrastructure. Global X U.S. Infrastructure Development ETF : This ETF comprises companies that are “part of the infrastructure theme,” regardless of sector. Holdings include Eaton, Rockwell Automation, United Rentals, Trane Technologies and Deere & Co. Invesco Russell 1000® Dynamic Multifactor ETF : This ETF tracks the Russell 1000 Invesco Dynamic Multifactor Index. Financials, industrials and consumer are the sectors that make up the bulk of the ETF. Top holdings include United Airlines, Marathon Oil, Tyson Foods, Best Buy, and Synchrony Financial. Heptagon Fund ICAV – Driehaus US Micro Cap Equity Fund : The fund invests in U.S. micro-cap companies with “good growth potential.” Top holdings include Xenon Pharmaceuticals, e.l.f Beauty, TransMedics Group, and FTAI Aviation. Vanguard Baillie Gifford Global Positive Impact Stock Fund : The fund invests in “high quality” companies that can deliver positive change in one of four areas: social inclusion and education; environment and resource needs; health care and quality of life; and addressing the needs of the world’s poorest populations. Holdings include Moderna, Deere & Co, Alnylam Pharmaceuticals, Coursera and Peloton. Invesco Water Resources ETF : This ETF tracks the Nasdaq OMX U.S. Water Index, which includes companies that create products to conserve and purify water. Machinery, water utilities and life sciences services are sectors which make up the bulk of the ETF. Top holdings include Ecolab, American Water Works, and Xylem.
