Industry Updates

2019’s top performing ETFs

George Geddes

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After a volatile and downward

trending period in Q4 2018

, this year has seen all asset classes climb significantly for the most part with commodities leading the charge.

This year, there have been global trade wars, environmental protests, Brexit deadline extensions, negative interest rates and countries tip-toeing the edge of a recession, but some ETFs have produced exceptional returns. Here are some of the top performing ETFs amid geopolitical and investor uncertainty.

The top performing ETP of 2019 has unsurprisingly come from the commodity asset class but in the form of the Xtrackers Physical Rhodium ETC (XRH0). For the year, XRH0 has produced returns in excess of 136%, significantly ahead of any other ETF, let alone the more popular gold ETPs which have produced returns of around 18% for the year.

Rhodium is a rare noble metal and used within automobiles production. It is one of the rarest within platinum group metals which means there is less liquidity in the underlying. Therefore, as demand grows, as it likely would for automobiles, the supply is limited forcing the price to go up.

Geographically, Russia has been a moneymaker for investors in 2019. Behind XRH0 in performance is the iShares MSCI Russia ADR/GDR UCITS ETF (CSRU) with year-to-date returns of 52.1%. CSRU’s largest holding with 19.3% weighting is Gazprom PJSC, a gas production company, and has seen its share price climb 86.6%. In fact, nearly 60% of CSRU is within the energy sector which is the contributor to its performance.

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While CSRU was aided by the performance of the energy sector, it was the technology sector ETFs that reigned supreme as it has for most of the year. The Invesco Technology S&P US Select Sector UCITS ETF (XLKQ) is the top performing sector exposed fund with returns of 46.6%. Its largest holdings, Apple and Microsoft which account for 38.4% of the fund saw their share prices rise 88.3% and 60.7%, respectively.

Commodity ETPs make a regular appearance in the top performing products of this year and after rhodium is a similar product used within the automobile production industry. The iShares Physical Palladium ETC (SPDM) has produced a YTD return of 47.3%. Palladium’s demand is roughly equal to rhodium’s but due to the increased supply and liquidity, the price and performances differ dramatically.

Other notable mentions include the WisdomTree Artificial Intelligence UCITS ETF (WTAI) with 51.1% returns, the iShares Listed Private Equity UCITS ETF (IPRV) with 40.2% and the L&G Gold Mining UCITS ETF (AUCO) with 40.5%.

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