Gold ETFs continue to surge

Added 19th October 2016

Gold, commodities and Latin American equities have been the best performing ETFs this year and worst performers have been linked to UK markets, according to FE data.

Gold ETFs continue to surge

As commodity prices recover and possibly stabilise, ETFs tracking commodity-related indices are showing strength year-to-date.

For funds approved for sale in Hong Kong and/or Singapore, the best performing ETF year-to-date in US dollar terms was Market Vectors' Junior Gold Miner ETF with a 110% return, according to FE data.

To use a timeworn comparison, if you put $10,000 in the Market Vectors' Junior Gold Miner ETF on 01 January, you would now have around $21,000.

The ETF aims to track the Market Vectors Global Junior Gold Miners Index. North American gold miners account for 75% of the exposure.

In fact, the top ten performing ETFs year-to-date are split between commodities and Latin America equity products.

Looking at the worst performer, the DB X-Trackers CSI300 Transportation UCITS ETF has a -27% return. 

China’s slowing GDP growth seems to be a key reason for the decline. The product takes exposure to A-shares listed on the Shanghai and Shenzhen Stock Exchange and aims to reflect the performance of the CSI300 Transportation Index, though it has fairly consistently underperformed the index since launch.

Airlines, railroads and marine ports & services account for about 72% of sector exposure and around 80% is fixed income products.

If you put $10,000 into the DB X-Trackers CSI300 Transportation product in January you would now have $7270.

Longer-term the product tells a different story. The CSI300 Transportation ETF seems to have fallen off a cliff this year. Over a three-year horizon, it has returned 23% versus the Junior Gold Miner ETF with 5.3%.


The top five performing ETFs year-to-date:



Turning to ETF sectors, Latin American equity fared the best (in US dollar terms) with an average 68.2% return, FE data shows.

The worst performing ETF sector year-to-date seems to be tied to Brexit: The fixed interest long maturity bonds in GBP sector has had an average return of -40.6% return. In fact, out of the ten worst performing ETF sectors, seven were linked to the UK market.

Record high

Passive products continue their run. Assets invested in ETFs/ETPs listed globally hit a new record high of $3.4trn at the end of Q3 2016, according to consultancy ETFGI.

In September, net new assets gathered globally were $25.2bn, marking the 32nd consecutive month of net inflows, the firm said.

The number of ETFs/ETPs is around 6500 (with ~12,000 listings).

However, Asia’s ETF listings are well behind the US and Europe. There are 486 ETFs listed in Hong Kong and/or Singapore, FE data shows.

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