One of the Top Performing ETFs of 2026 So Far May Surprise You

Key Points

• BWET is one of the leading ETFs by year-to-date performance, with returns of around 98% so far in 2026.
• The fund has a unique focus on oil freight futures, generating profit when oil shipment prices rise beyond market expectations.
• However, BWET's sky-high expenses, limited asset base, and low trading volume all present additional risks on top of an already-complex strategy.

As the market settles into 2026, exchange-traded funds (ETFs) remain as popular an investment as ever. U.S. ETFs gobbled up an incredible $1.48 trillion in total inflows in 2025 as hundreds of new products launched, further broadening the scope and depth of strategies available to investors through these tools.

In the face of uncertainty about the impact of geopolitics, trade shifts, a possible AI bubble, and more, investors might increasingly turn to ETFs for their defensive potential. On the other hand, though, a number of funds have hit the ground running with incredible momentum in 2026 and may present an opportunity for investors with a bit more risk tolerance to notch some impressive gains early in the year.

One such fund is the Breakwave Tanker Shipping ETF NYSEARCA: BWET, which may surprise investors with its spot near the very top of the list of top-performing ETFs so far in 2026. BWET has returned nearly 100% year-to-date (YTD), contributing to its overall 223% gain in the last 12 months. Below, we'll take a closer look at what may be driving this growth, whether BWET's biggest rally may still be in store, and what investors might keep in mind when considering this as a high-momentum ETF option to add to a portfolio.

A Closer Look at BWET's Strategy

BWET offers investors exposure to the crude oil transport market via the Breakwave Tanker Futures Index. The index follows crude oil tanker freight rates by investing in futures contracts. As one of the few ways for investors to gain access to freight futures without participating in the futures market directly, BWET's unique exposure goes beyond a strategy that holds shares of oil tanker companies.

Instead, it looks to generate gains when the price of oil freight futures increases to a degree that is not already predicted by the market.

Global oil shipping remains a vital part of the energy industry and centers around major exporting nations like the United States, Venezuela, and Brazil and those that primarily import, including China and many European countries. Shipping rates reached a multi-year high late in 2025 as demand rose, and with cold winter temperatures likely to continue for some time, demand may remain high in many parts of the world in future weeks.

BWET's approach utilizes oil freight futures contracts of one to six months forward and with a weighted average expiration between 60 and 90 days. Most of the index tracks very large crude carriers (VLCCs), the tankers with the greatest capacity possible.

Evaluating BWET's Recent and Potential Performance

BWET's surge in recent months is likely due to both increased demand during the winter season and shifts in global oil trade resulting from ongoing U.S. pressure on Venezuela and other political developments. While winter demand is likely to persist through March, it will subside before too long, and it's likely that the greatest demand for this season is behind us.

However, the impact of ongoing geopolitical conflict on the global oil market may persist and continue to evolve. The exact repercussions for those trading freight futures are more difficult to assess, but investors believing further turmoil could leave freight rates elevated may see the possibility of a continued rally for BWET going forward.

Other Factors to Consider

Despite excellent performance this year, there are other factors that investors should consider before adding BWET to a portfolio. Primarily, an investment in futures contracts—even indirectly through an ETF, as in this case—is inherently complex and can be riskier than traditional equities investments. BWET's niche strategy has a fairly narrow appeal, as the ETF has just $8.5 million in managed assets and a low average trading volume that may add unanticipated costs or difficulty for more active traders.

Further, an investor's return on BWET is impacted by the fund's very high expense ratio of 3.5%—and indeed, this fee may become even higher in the future, as the fund sponsor made a special offer to investors to limit the fee to 3.5% through the end of 2025 and warned that expenses could increase after that time. This may limit BWET investors to only the most stalwart, although others seeking to benefit from the oil market may find suitable alternatives elsewhere.