February’s biggest returners

by , 5th March 2019

As January saw the equity markets rebound from a difficult end to 2018, momentum carried on throughout February.

Most notably, February was a strong period for ETFs comprised of Chinese A shares. Seven CSI 300 and China A ETFs produced returns in the double digits, according to data from JustETF. The Xtrackers CSI 300 Swap UCITS ETF produced returns of 15.23% for the month, the largest of any European ETF for the period. Trade talks between the US and China caused a spike for the Chinese ETFs and is likely to improve the liquidity in the country’s financial system despite the slow down in its economic growth.

ETF AUM 1M Return YTD
Xtrackers CSI 300 Swap UCITS ETF 417 15.23% 20.08%
Xtrackers Harvest CSI 300 INDEX UCITS ETF 400 14.69% 19.06%
Lyxor Fortune SG UCITS ETF MSCI China A 38 14.41% 18.92%
L&G E Fund MSCI China A UCITS ETF 17 13.98% 19.87%
HSBC MSCI China A Inclusion UCITS ETF 180 13.71% 18.29%

 

Another top performer for the month was the US industrial sector. The largest holdings for most industrial ETFs include Boeing and 3M . The performance of the sector, similar to the previously mentioned China ETFs, was heavily influenced by the negotiations between the US and China. The SPDR S&P US Industrials Select Sector UCITS ETF and the Invesco US Industrials Sector UCITS ETF saw monthly returns of 8.67% and 8.66%, respectively.

ETF AUM 1M Returns YTD
SPDR S&P US Industrials Select Sector UCITS ETF 41 8.67% 13.99%
Invesco US Industrials Sector UCITS ETF 53 8.66% 14.01%
iShares S&P 500 Industrials Sector UCITS ETF 7 8.40% 13.73%

 

The third strong performer for February was the US and world information technology sectors. The US and World information technology ETFs may differ in names, however the “World” technology ETFs are still significantly comprised with US-domiciled companies. The Xtrackers MSCI World Information Technology Index UCITS ETF’s country allocation is 85% in the US, with the second largest country being Japan with just under 6%.

Apple has a significant weighting in technology ETFs and therefore heavily influences the NAV of the funds. The FAANGs giants had an underwhelming end to 2018 in terms of revenue and faced a major sell off throughout Q4. However the share price has since recovered, bouncing back from its decline which was a loss of over a third of its value. Other holdings for the sector’s ETFs include Microsoft, Intel and Visa have started the year well.

ETF AUM 1M Return YTD
Xtrackers MSCI USA Information Technology Index UCITS ETF 18 7.88% 10.68%
Invesco US Technology Sector UCITS ETF 294 7.55% 9.96%
SPDR S&P US Technology Select Sector UCITS ETF 46 7.52% 9.94%
iShares S&P 500 Information Technology Sector UCITS ETF USD 1026 7.35% 9.87%
Xtrackers MSCI World Information Technology Index UCITS ETF 310 7.06% 10.34%
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