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Further Reading from MarketBeat One of the Top Performing ETFs of 2026 So Far May Surprise YouAuthor: Nathan Reiff. First Published: 2/16/2026. 
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.
- Special Report: [Sponsorship-Ad-6-Format3]
As the market settles into 2026, exchange-traded funds (ETFs) remain as popular as ever. U.S. ETFs attracted an impressive $1.48 trillion in total inflows in 2025 as hundreds of new products launched, broadening the range of strategies available to investors through these vehicles. With uncertainty around geopolitics, trade shifts, a potential AI bubble and more, many investors may increasingly seek out ETFs for their defensive potential. At the same time, several funds have started 2026 with strong momentum and could offer opportunities for investors willing to accept higher risk in pursuit of outsized early-year gains. One such fund is the Breakwave Tanker Shipping ETF (NYSEARCA: BWET), which sits near the top of the list of best-performing ETFs so far in 2026. BWET has returned nearly 100% year-to-date (YTD), contributing to a 223% gain over the past 12 months. Below, we examine what may be driving this performance, whether the rally has further to run, and what investors should consider before adding BWET to a portfolio. A Closer Look at BWET's Strategy BWET gives investors exposure to the crude oil transport market through the Breakwave Tanker Futures Index, which tracks crude oil tanker freight rates by investing in futures contracts. As one of the few ways for investors to access freight futures without trading futures directly, BWET's exposure goes beyond simply holding shares of oil tanker companies. Instead, the fund seeks to generate gains when oil freight futures rise more than what the market has already priced in. Global oil shipping remains a vital part of the energy supply chain, involving major exporters such as the United States, Venezuela and Brazil and major importers including China and many European countries. Shipping rates reached a multi-year high late in 2025 as demand increased. With cold winter temperatures persisting in parts of the world, demand may stay elevated in the coming weeks. BWET's approach uses oil freight futures dated one to six months forward, with a weighted average expiration between 60 and 90 days. Most of the index follows very large crude carriers (VLCCs), the tankers with the greatest capacity. Evaluating BWET's Recent and Potential Performance BWET's recent surge likely reflects seasonal winter demand and shifts in global oil trade driven by developments such as ongoing U.S. pressure on Venezuela and other geopolitical factors. While elevated winter demand may persist through March, it should subside afterward, suggesting the seasonal peak may be behind us. That said, geopolitical conflict and other trade disruptions could continue to affect the global oil market. The precise effects on freight futures are hard to predict, but investors who expect further turmoil—and therefore sustained higher freight rates—may view BWET as having potential to rally further, albeit with significant uncertainty. Other Factors to Consider Despite strong recent performance, several important risks and limitations deserve attention. Investing in futures contracts—even indirectly through an ETF—adds complexity and can be riskier than traditional equity investments. BWET pursues a niche strategy and has relatively small assets under management (about $8.5 million) and low average trading volume, which can create liquidity challenges and unexpected trading costs for active investors. BWET also carries a high expense ratio of 3.5%. The fund sponsor offered to cap the fee at 3.5% through the end of 2025 and warned that expenses could rise afterward. Such a high cost can erode returns and may make the ETF suitable primarily for investors with strong conviction in freight-rate exposure. Others seeking oil-market exposure may prefer alternative energy plays or broader oil and shipping strategies with lower fees and greater liquidity. In short, BWET has delivered eye-catching returns so far in 2026, but its niche focus, complexity, limited liquidity and high fees mean it's best considered a tactical or speculative holding rather than a core, long-term position for most portfolios.
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