Best and Worst Performing ETFs in September

The energy sector dominated the top performers’ list, but cryptos and precious metals ETPs, struggled

Valerio Baselli 5 October, 2021 | 10:45AM
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According to Morningstar data, there are about 59 percentage points between the best and worst performing European exchange-traded products (ETPs) in September, with returns for the month ranging from 35.6% to -24%.

We have looked at the key trends in the ninth 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.

The Leaders

best performing EU ETFs

The Top 20 of exchange traded products (ETPs) is led in September by BNP Paribas’ HENRY HUB ERDGAS ETC (BNQ9), a collateralised exchange-traded commodity incorporated in Germany that tracks the Total Return performance of the rolling Henry Hub Natural Gas Futures.

Natural gas funds, along with the whole energy sector, dominate September’s rankings. The increases in electricity and gas bills, as well as petrol, that have been occupying the front pages of newspapers for weeks are clearly part of this context (in which the arrival of the cold season does not help).

Natural gas is the energy commodity most affected by this trend. Its value has essentially doubled since the beginning of the year and almost tripled since June 2020, amidst the pandemic. And the rally may only be beginning. According to the US Energy Information Administration (EIA), industrial sector natural gas consumption can be expected to increase throughout 2021 and exceed pre-pandemic levels.

“We forecast the growth to continue into 2022, and natural gas delivered to industrial consumers will average 23.8 billion cubic feet per day (Bcf/d) that year. If realised, this amount would be near the current record high for annual industrial natural gas consumption set in the early 1970s”, according to EIA’s Short-Term Energy Outlook. Moreover, given the low level of CO2 emissions associated, natural gas consumption can also be expected to increase during the energy transition.

In fifth place there is the 21Shares Solana ETP (AS0L), launched on June 28, one of the few cryptocurrencies in positive territory last month. The digital token’s project, whose innovative technology has generated significant visibility, claims that it has created the world’s fastest blockchain. Solana is up more than 13,200% for year-to-date.

The Laggards

20 worst performing ETFs

At the same time, though, September was a rough ride for crypto investors, as several cryptocurrencies plunged. Bitcoin, the largest cryptocurrency by market value slid 12% in the same month when El Salvador has become the first country in the world to make the cryptocurrency legal tender.

At the top of the worst performing ETFs, however, we find several trackers exposed to rhodium and palladium. Having slipped by more than 20 percentage points, these instruments experienced their worst monthly performance in 10 years. Rhodium, the most expensive industrial metal, has suffered the most. Palladium isn’t far behind.  

The main reason for these drops was the sharp slowdown in global auto production, as carmakers are struggling to resume normal activity because of the shortage of microchips. The metals are used in catalytic converters to reduce harmful emissions. The price slump comes as a big contrast with the vigorous performance earlier in the pandemic, driven by supply shortages and hopes of an economic recovery.

The Biggest

Below you have an overview of the biggest European-domiciled ETPs in terms of assets. Monthly performances go from 2% of the iShares China CNY Bond UCITS ETF USD (CNYB) down to the Xtrackers Euro Stoxx 50 UCITS ETF 1D (XESX), which lost 3.2% in the month.

Biggest European ETFs

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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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About Author

Valerio Baselli

Valerio Baselli  is Senior Editor at Morningstar.