The U.S. stock market witnessed a strong start to 2018 given that last year’s bullishness remained intact. The S&P 500 index topped 2,700 for the first time led by technology stocks.

Investors are bargain hunting tech stocks after the recent sell-off given the high potential of growth in the sector. In particular, chipmakers are driving most of the rally in the New Year with the Philadelphia Semiconductor index surging 1.7% in its strongest two-day performance since June 2016.

Fed minutes and upbeat manufacturing data also added to the strength. Although Fed officials remained wary over future inflation, they expressed growing confidence in the strength of the labor market and the economy. They expect a $1.5 trillion tax cut to provide a boost to the economy and inflation, thereby paving the way for faster rate hikes.

The latest data confirms the robust economic growth. U.S. factory activity, as indicated by the Institute for Supply Management (ISM) index, increased more than expected in December with the second-highest reading in six years buoyed by a surge in new orders growth. Construction spending hit record highs in November with broad-based gains in both private and public outlays.

Given this, we have highlighted five U.S. equity ETFs and five stocks of the S&P 500 index that are outperforming to start the New Year.

Best ETFs

ELEMENTS DJ High Yield Select 10 ETN (DOD – Free Report)

This is an ETN option and provides investors pure play to the 10 highest dividend-yielding securities in Dow Jones Industrial Average in equal proportions. It tracks the Dow Jones High Yield Select 10 Total Return Index and charges 75 bps in annual fees. The note has amassed only $37.3 million in its asset base while trades in a light volume of around 8,000 shares on an average daily basis. DOD gained 9.1% to start the New Year.

ARK Innovation ETF (ARKK – Free Report)

This is an actively managed fund focusing on companies that are expected to benefit from the development of new products or services, technological improvement and advancements in genomic revolution, Web x.0 and industrial innovation. It holds 53 stocks in its basket with none having more than 6.2% share. The ETF has amassed $398 million in its asset base and trades in a good average daily volume of around 156,000 shares. The expense ratio comes in at 0.75%. The ETF is up 4.5% in the first to initial days of trading.