Best and Worst Performing ETFs in June

Natural gas and crude oil dominate the top performers’ list. On the other hand, cryptos ETPs and gold struggled

Valerio Baselli 13 July, 2021 | 11:29AM
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According to Morningstar data, there are about 61 percentage points between the best and worst performing European exchange-traded products (ETPs) in June, with returns for the month ranging from 24.7% to -33.4%.

We have looked at the key trends at the halfway point of the year, excluding inverse and leveraged funds. The funds, being purely passive products, reflect the evolution of the markets without the bias (good or bad) of an active manager.

The Leaders

The top 20 ETFs list for June is led by WisdomTree Natural Gas (NGSP). The commodity’s price regained its December 2018 highs in June and remains supported by expectations of higher air-con and cooling demand as the weather forecast points to a hot summer in the US.

The KraneShares ICBCCS SSE Star Market 50 Index UCITS ETF (KSTR) gained almost 17% in June, despite having only launched on May 26 on the London Stock Exchange. The fund’s benchmark comprises the 50 largest securities listed on the Shanghai Stock Exchange Science and Technology Innovation Board (STAR Market). The STAR Market includes companies from industries such as new-generation information technology, biomedicine, new energy, and environmental protection.

Another energy commodity on the rise is crude oil. The value of WTI crude oil went up from $67 to $73.5 per barrel in June, reaching almost $77 on July 6. On one hand, economic recovery has pushed demand for oil higher, “though the Covid-19 delta variant presents a new challenge, we do not expect it to stifle the global recovery”, says Dave Meats, director of research, energy and utilities, for Morningstar. “The outbreak in India is subsiding after May’s peak, and we believe the country is on the right path. Meanwhile, mass vaccinations in developed markets continue to provide the necessary backdrop for a full recovery in demand by 2022”.

However, the lack of agreement between oil producing countries during their most recent meeting in Vienna caused a further rebound in prices. Opec+ ministers called off oil output talks as they were unable to find common ground on a future increase in production to meet the growing demand. Opec’s Secretary General Mohammad Barkindo said in a statement on Monday the meeting had been cancelled, without a date for the next one yet agreed, which left investors in the grip of uncertainty.

20 best performing ETFS of june

The Laggards

Several cryptocurrencies plunged last month as negative news again dampened investor sentiment on bitcoin and its peers. CoinShares Physical XRP (XRPL), which provides direct exposure to the price of the Ripple network’s native asset, lost 33.4% in June.

The Bitcoin price almost halved from over $64,000 to $33,500 from mid-April through to end of June amid a broader cryptocurrency sell-off that has also dragged crypto-linked stocks lower. Sentiment on cryptocurrencies has been crushed because of a crackdown on the sector by China, which banned bitcoin mining activities, forcing several crypto companies to move abroad, mainly towards Kazakhstan or the US. The cryptocurrency market has been dreading a possible intensifying regulatory crackdown in other parts of the world too. On July 8, for example, US Senator Elizabeth Warren warned of the growing risks posed by the “highly opaque and volatile cryptocurrency market”, pointing to its lack of regulation as unsustainable.

The gold and mining sectors also struggled in June. The L&G Gold Mining UCITS ETF (AUCO) lost more than 14%. The fund tracks the DAXglobal Gold Miners Index, whose constituents are exclusively companies that generate at least 50% of their income in the gold mining space.

Having benefited from the comeback of inflation, the value of the yellow metal fell from $1,907 to $1,769 per ounce in June. Behind the crash there is some profit-taking, alongside concerns about the implications of the US Federal Reserve’s announcement that it anticipates interest rates to rise earlier than planned.

20 worst ETFs of June
The Biggest

Monthly top and flop performers often coincide with very volatile and therefore risky products, which should only ever play a satellite role in your portfolio. Below is an overview of the biggest European-domiciled ETPs in terms of assets, which could be more appropriate to consider among core holdings. Monthly performances range from 5.5% from the Invesco S&P 500 UCITS ETF (SPXS)down to the Xetra-Gold (4GLD), which lost 4.4% in the month.

20 biggest ETFs of Junr



The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Valerio Baselli

Valerio Baselli  is Senior International Editor at Morningstar.

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