Top Performing ETFs Capturing Market Momentum in Early 2026

The opening weeks of 2026 have presented a compelling investment landscape, with top performing ETFs reflecting diverse market opportunities driven by geopolitical events, monetary policy shifts, and corporate developments. While major indices logged mixed but steady progress—the S&P 500 advancing 1.4%, the Dow Jones climbing 2.7%, and the Nasdaq Composite gaining 1.2% through January—beneath these headlines lies a more nuanced story of sector rotation and emerging winners that savvy investors have capitalized on.

Geopolitical Turbulence Powers Defense Sector Rallies

Rising tensions in global hotspots have created tailwinds for defense-focused investments. The sector received particular momentum in early January following U.S. actions in Venezuela, amplifying a trend that already gained strength throughout 2025 amid escalating security concerns worldwide. This environment has positioned defense ETFs among the top performing instruments year-to-date.

The iShares US Aerospace & Defense ETF (ITA) exemplifies this surge, advancing 9.8% since the start of the year. Investors seeking exposure to defense contractors, military technology providers, and related industries have rushed into this space, betting on sustained defense spending across developed nations.

Japanese Equities Hit Record Peaks Amid Political Optimism

Japan’s equity markets have reached unprecedented heights, buoyed by expectations that Prime Minister Sanae Takaichi will dissolve parliament and call snap elections for February 8, 2026. The anticipated vote represents a chance for her administration to convert high approval ratings into expanded parliamentary power, a prospect that has energized markets.

Concurrent developments in Japan’s fixed-income markets have added complexity. The nation’s 40-year government bond yield reached record levels as investors fretted over proposed reductions to food sales taxes—a move that could strain the country’s already-tight fiscal position. Nonetheless, anticipated fiscal stimulus measures, including elevated defense spending and targeted tax cuts, are expected to support economic growth and equity valuations.

The iShares MSCI Japan ETF (EWJ), tracking broad Japanese equity exposure, has gained 5.1% year-to-date, reflecting the market’s constructive outlook.

Precious Metals Find Favor in Uncertain Times

Gold has emerged as a notable beneficiary of political uncertainty and global instability. The precious metal reached fresh record highs in January as investors rotated toward safe-haven assets amid U.S. political developments and deteriorating conditions in Iran. Long-term bullish factors—including expectations for Federal Reserve rate reductions and continued central bank accumulation of bullion reserves—continue to underpin gold’s appeal.

The SPDR Gold Trust (GLD), a leading gold-backed ETF, has captured this momentum with a 5.8% year-to-date gain, providing investors with liquid, transparent exposure to precious metals appreciation.

Strategic Semiconductor Pact Reshapes Tech Landscape

In mid-January 2026, the United States and Taiwan finalized a landmark trade agreement worth $500 billion aimed at building advanced semiconductor manufacturing capacity on American soil. Under the accord, Taiwanese chip companies committed to investing at least $250 billion in U.S. production facilities, while Taiwan’s government pledged $250 billion in credit guarantees to facilitate supply-chain relocation.

This structural development has reverberated across technology-focused investment vehicles, positioning semiconductor and semiconductor-adjacent ETFs to benefit from years of capital deployment and manufacturing expansion.

Top Performing ETF Winners Dominating 2026 Returns

Beyond broad market exposure, several specialized ETFs have delivered outsized returns, capitalizing on specific themes and market dislocations:

CoinShares Bitcoin Mining ETF (WGMI) has surged 33.4% year-to-date. Bitcoin itself gained approximately 4% through January, propelled by Federal Reserve accommodation and softer employment data that signaled potential for sustained monetary ease. The Trump administration’s pro-cryptocurrency platform and discussion of establishing U.S. Bitcoin reserves have further stimulated institutional demand and market optimism.

REX Drone ETF (DRNZ) has advanced 33.1% year-to-date. This fund tracks the VettaFi Drone Index, which measures performance of global companies engaged in unmanned aerial vehicle manufacturing and enabling technologies. The rally in defense stocks provided considerable support for drone-sector equities, as military and commercial applications expand. The fund charges 65 basis points annually.

Roundhill Meme Stock ETF (MEME) has climbed 31.9% year-to-date. The fund seeks capital appreciation through exposure to companies that experience heightened retail participation and rapid sentiment shifts. Such volatility can generate outsized moves, and the Meme Stock ETF has benefited accordingly. The fund carries annual expenses of 69 basis points.

YieldMax MRNA Option Income Strategy ETF (MRNY) has gained 30.8% year-to-date. The underlying Moderna Inc. (MRNA) has jumped 35.6%, following the company’s November announcement raising its 2025 revenue guidance to the $1.6-$2.0 billion range, up from prior guidance of $1.5-$2.2 billion. As an actively managed fund employing call-option writing strategies on MRNA, the MRNY ETF generates monthly income while providing equity exposure. The fund yields 99.78% annualized and charges 99 basis points in fees.

Global X Blockchain ETF (BKCH) has delivered 29.8% year-to-date returns. Blockchain infrastructure and mining companies have rebounded sharply as institutional capital flows resumed and rate-cut expectations supported risk asset appetite. Bitcoin’s recovery throughout January accelerated gains in this sector-focused fund.

Navigating the Top Performing ETF Landscape

The diversity of top performing ETFs in early 2026 underscores a market rewarding both defensive positioning and growth-oriented bets. Whether through traditional sectors like aerospace and defense, international equities like Japanese stocks, safe-haven assets like gold, or emerging themes like blockchain and drones, opportunities abound for investors willing to align their ETF selections with broader macroeconomic and geopolitical developments.