These types of ETFs could prove winners in the second half

The rally to record stock market highs and the launch of new bitcoin funds gave the first half of 2024 notable milestones for the ETF industry. The second half brings hurdles that hurt the odds of a repeat performance. The best-performing ETFs in the second half will likely be decided by broader shifts in the markets and economy.

Wall Street is waiting to see when the Federal Reserve starts to cut interest rates amid signs that economic growth is already starting to falter. "The biggest visible risk to this rally is if the Fed stays too restrictive for too long," said Michael Arone, chief investment strategist for the U.S.

SPDR Business at State Street Global Advisors. Even with mounting uncertainty, however, there are some types of ETFs that could emerge as winners. Equities A handful of stocks were big winners in the first half, and some narrowly-focused ETFs were able to ride that wave.

Assets in the Roundhill Magnificent 7 ETF (MAGS) , for example, have grown to more than $500 million. Single-stock funds tied to Nvidia have also seen heavy interest, including the GraniteShares 2x Long Nvidia ETF (NVDL) . MAGS YTD mountain The success of megacap tech stocks has been a key story in this market rally, including among ETFs.

The Magnificent 7 ETF is up more than 40% in 2024. Strategists at top ETF firms aren't calling for investors to completely move away from these giant stocks, but do suggest finding ways to dilute the exposure. "We want to have exposure there but so many po.