Momentum from 2017 has continued so far this year, with the MSCI World Index rising in most of the trading sessions since the 1 January.
Thanks to rising global economic growth, low inflation, rebounding oil prices and action from central banks, US equity markets reached eight record closing levels this year. The S&P 500 enjoyed its best 10-day start since 2003, CNBC reported, climbing more than 4% in that period.
A falling US dollar has helped the commodities market. In fixed income, yields are also rising on government debt. For example, two-year Treasury yields have reached 2% for the first time since the 2008 financial crash.
Momentum: Can it continue?
It is yet to be seen whether the top performing ETFs of last year will continue to rally at the same pace in 2018.
Emerging markets did well last year on a region and country-wide basis, thanks to the position of the dollar: as many of these countries hold debt in US dollars, the weaker the dollar, the less costly for these countries to pay their debt.
Although the Federal Reserve is anticipated to hike interest rates several times this year, it has not acted so far as quickly as first thought – the delays will also help debt-laden emerging economies.
In the US, technology was one of the leading sectors last year. The Technology Select SPDR Fund (XLK) was up 36%.
Assets in US-listed ETFs grew by more than 34% last year to $3.42 trillion.
Despite US equities reaching record highs, Citigroup said in a recent report that the ETF market has shown some signs of slowing down. In 2017 there were reportedly more ETF launches than the year before, but still failed to top the 270 new funds from 2015. ETF closures also hit a record for the second year in a row, the report found.