After many months of suffering, the list of the 12 best-performing ETFs (hereinafter exchange-traded products, or ETPs) welcomes a large number of cryptocurrency-exposed strategies. Ethereum has had the biggest bounce over the past month, with ether tracker One XBT Provider (ETHEREUM X) surging about 74 percentage points in value.
This was fueled by the much-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 is also becoming more sustainable and environmentally friendly.
Market leader Bitcoin (BTC) also performed well. Nearly a year after the decision to make BTC the country’s official currency, El Salvador’s Finance Minister Alejandro Zelaya stated a few days ago that the digital currency had brought financial services to a largely bankless population and attracted tourism and investment.
Although its use as a medium of exchange is low, he remains a believer in digital currencies. Zelaya added that the government still plans to issue a Bitcoin-backed bond using blockchain technology.
There is also a new addition in July: Sprott Uranium Miners UCITS ETF (URNM). Launched in May, this tracker broke the $10 million AUM mark last week. The aim is to offer investors an opportunity to invest in nuclear energy through exposure to uranium miners.
At the beginning of July, the EU Parliament voted to designate natural gas and nuclear energy as environmentally friendly energy sources. According to the taxonomy, new nuclear and gas-fired power plants built by 2030 will be recognized as transitional energy sources as long as they are used to replace dirtier fossil fuels such as oil and coal.
Worst performing ETPs
In the ranking of the worst performing ETPs in July, several funds see exposure to emerging markets, notably China, as well as commodities: carbon, copper and wheat.
Chinese stocks, meanwhile, posted their worst monthly loss in a year, with Hong Kong-listed stocks falling 10%. This was a clear sign that all the worries that had investors anxious over the past year are far from gone.
Furthermore, as Morningstar’s John Rekenthaler reminds us, measuring the performance of Chinese stocks is difficult. As a burgeoning 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 highly volatile and therefore risky products that should take on a satellite role in your portfolio.
Below is an overview of the largest European-domiciled ETPs by asset. Performance in June 2022 ranges from -6.7% for iShares Core FTSE 100 UCITS ETF (ISF) to iShares $ Treasury Bond 1-3yr UCITS ETF USD (IBTS) which is up 1.8% over the last month.
methodology
There is about 90 percentage points between the best and worst European ETPs in July, with returns for the month ranging from 73.5% to -17.6%.
We looked at what Morningstar’s data tells us about the key trends for the seventh month of the year, excluding inverse and leveraged funds. These instruments, which are purely passive products, reflect the movements of the markets without the bias (good or bad) of an active manager.
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