Q3 2019 was an interesting summer period for the ETF market as performances across asset classes changed month after month, but one asset class which dominated the top performers was commodities.

Geopolitical events resulted in rollercoaster performances for the global equity market. To avoid the risk of significant losses, investors rotated out of equities into commodity ETFs, as well as bond ETFs, and this was reflected in both flows and rallying performances over the course of the three months.

The top performing product for Q3 and 2019 was in fact the Xtrackers Physical Rhodium ETC (XRH0). Its three-month return was 43.8% which contributed to its year-to-date return of 101.9%.

One major difference between fixed income and commodities is how the value of the latter is so heavily influenced by supply and demand. When demand rises, so does the potential for positive returns.

After rhodium, silver was the next best returning exchange-traded commodity, ahead of gold. The Invesco Physical Silver ETC (SSLV) has produced returns of 13.3% over the last three months, ahead of the WisdomTree Physical Swiss Gold (SGBS) which climbed only 5.4% over the same period. SGBS’s Q3 rally was mostly hindered by its performance in September as the ETF fell 2.9%, despite the commodity having record inflows and all-time high assets under management in the previous two months.

Gold ETFs start to lose their shine

Shifting the focus onto equity ETFs, a number geography and sector-focused products still managed to produce double-digit returns in Q3, even outperforming a few of the previously highlighted commodity ETFs.

The US utility sector is one of those exposures which has performed well. The net asset value for the SPDR S&P US Utilities Select Sector UCITS ETF (SXLU) climbed 13.1% in Q3, making it one of the top performing equity ETFs for 2019. Year-to-date, the SXLU has returned 30.5%.

Another sector which produced modest returns was the consumer staples industry in the US. The iShares Evolved US Consumer Staples ETF (I00E) produced a little over 9% returns over the three months.

While equity ETFs are seen to be the more profitable investment when markets are positive and fixed income is seen to be the lower risk and small return option, there has been a handful of bond ETFs which have proven otherwise.

Q3 2019: ETF market roundup

The iShares USD Treasury Bond 20+yr UCITS ETF (IDTL) and the SPDR Barclays 15+ Year Gilt UCITS ETF (GLTL) offered returns of 8.9% and 10.3%, respectively. This significantly positive summer performance means IDTL’s YTD return is 20.6% and GLTL’s is 19.3%.

ETFAsset ClassThree-Month ReturnYTD Return
Xtrackers Physical Rhodium ETC (XRH0)Commodity43.8%94.8%
Invesco Physical Silver ETC (SSLV)Commodity13.3%12.1%
WisdomTree Physical Swiss Gold (SGBS)Commodity6.5%15.5%
SPDR S&P US Utilities Select Sector UCITS ETF (SXLU)Equity13.1%30.4%
iShares Evolved US Consumer Staples ETF (I00E)Equity9.0%n/a
iShares USD Treasury Bond 20+yr UCITS ETF (IDTL)Fixed Income8.9%20.6%
SPDR Barclays 15+ Year Gilt UCITS ETF (GLTL)Fixed Income10.3%19.3%