Industry Updates

Which sectors recovered in April as coronavirus lockdowns ease?

George Geddes

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The US energy sector, India equity and gold mining recovered significantly in April following a treacherous Q1 as numerous countries begin to ease lockdown restrictions globally.

The Invesco Morningstar US Energy Infrastructure UCITS ETF (MLPP) was one of the top-performing ETFs last month as it’s net asset value (NAV) climbed 69.1%.

However, MLPP’s year-to-date performance as of April’s end remained heavily in the red at -34.9%.

Similarly, the gold mining industry had a promising month as numerous ETFs with the exposure are posting double-digit returns for the year so far.

Notably, the $1.7bn iShares Gold Producers UCITS ETF (SPGP) posted a NAV increase of 35.8% for the month. This bolstered its YTD returns to 17.4%.

Other ETFs which have performed well in April include the Xtrackers MSCI World Consumer Discretionary Index UCITS ETF (XDWC), the Franklin FTSE India UCITS ETF (FLXI) and the UBS MSCI EMU Small Cap UCITS ETF (UEFD) and which climbed 17%, 11.8% and 11.2%, respectively.

How coronavirus impacted markets in Q1

Not every sector or industry is recovering from the woes suffered in Q1 however.

After two months of strong performance, the commodity palladium saw its value fall dramatically in March before recovering just as sharply two weeks later. But ETCs with the exposure have suffered steady losses throughout April.

The Xtrackers Physical Palladium ETC (XPAL) was one of the worst-performing ETPs last month as its NAV fell 18.4%. Yet its YTD performance remained positive at 2.8%.

While the energy sector in the US picked up some pace again, the same can’t be said for its European counterpart.

The SPDR MSCI Europe Energy UCITS ETF (ENGY) fell a modest 1.7%, which brought it YTD performance down to -34.5%.

Certain areas in the fixed income ETF space have fallen in value as well, in particular, the euro government bond asset class.

The iShares EUR Government Bond 10-15yr UCITS ETF (IBGZ) fell 1.9% in April. After a YTD return of 9% as of 23 March, this figure fell to 1.6% at April’s end.

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