After many months of suffering, the 12 best-performing ETF list (hereafter referred to as exchange-traded products, or ETPs) welcomes a large number of strategies exposed to cryptocurrencies. Ethereum had the biggest rebound last month, and the Ether Tracker One XBT Provider (ETHEREUM X) increased in value by about 74 percentage points.
This has been driven by the highly-anticipated merger (scheduled for September) between Ethereum and the Beacon Chain proof-of-stake system. The core network will add the ability to execute smart contracts through proof-of-stake, with full history. The chain will also become more sustainable and environmentally friendly.
Market leader Bitcoin (BTC) also did well. Almost a year after the decision to make BTC the country’s official currency, El Salvador’s finance minister, Alejandro Zelaya, declared a few days ago that the digital currency had brought financial services to a largely unbanked population and attracted tourism and investment.
Although its use as a medium of exchange is low, he said he continues to believe in digital currencies. Zelaya added the government is still planning to issue a bond backed by Bitcoin using blockchain technology.
July also sees a new entry: Sprott Uranium Miners UCITS ETF (URNM). This tracker was launched in May and passed the $10 million AUM mark last week. It seeks to provide investors with a way to invest in nuclear power through exposure to uranium miners.
In early July, the EU Parliament voted to designate natural gas and nuclear as environmentally sustainable energy sources. Under the taxonomy, new nuclear and gas-fired plants built through 2030 will be recognised as transitional energy sources, as long as they are used to replace dirtier fossil fuels such as oil and coal.
Worst Performing ETPs
The ranking of worst performing ETPs in July sees several funds exposed to emerging markets, especially China, as well as commodities: carbon, copper, and wheat.
China stocks saw their worst monthly loss in a year, meanwhile, with shares listed in Hong Kong slumping 10%. This was a clear sign that all the worries that spooked investors much of the past year are far from gone.
Moreover, as Morningstar’s John Rekenthaler reminds us, measuring the results of Chinese stocks is tricky. As an emerging exchange, with various rules restricting the activities of foreign investors, China’s stock market poses challenges for indexers.
Biggest ETPs
Monthly top and flop performers often coincide with very volatile and therefore risky products, which should play a satellite role in your portfolio.
Below is an overview of the biggest European-domiciled ETPs by assets. Performances in June 2022 go from -6.7% of the iShares Core FTSE 100 UCITS ETF (ISF) up to the iShares $ Treasury Bond 1-3yr UCITS ETF USD (IBTS), which gained 1.8% last month.
Methodology
There are about 90 percentage points between the best and worst performing European ETPs in July, with returns for the month ranging from 73.5% to -17.6%.
We have looked at what Morningstar’s data is telling us about the key trends in the seventh month of the year, excluding inverse and leveraged funds. These instruments, being purely passive products, reflect the evolution of the markets without the bias (good or bad) of an active manager.
