Best and Worst Performing ETFs in September

Among the month’s top picks were wheat, palladium and silver ETFs. But UK inflation-linked bonds, natural gas, hydrogen and the European real estate sector suffered

Valerio Baselli 5 October, 2022 | 9:37AM
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WisdomTree Wheat ETC (WEAT) topped the list of best performing exchange traded products (ETPs) registered for sale in the UK in September, gaining 15.7%, according to Morningstar Direct. Wheat futures prices leaped to their highest level in two months following release of the US Agriculture Department stating that US growers reaped their second-smallest wheat crop in 20 years due to drought in the Plains. The smaller-than-expected harvest would delay any American role in restoring grain flows disrupted by the Russian invasion of Ukraine.

In second place was the Lyxor S&P 500 VIX Futures Enhanced Roll UCITS ETF (LVO), with 12% of total return last month. This tracks the S&P 500 VIX Futures Enhanced Roll Index, a benchmark that offers exposure to the expected implied volatility of the S&P 500. Also known as the “fear gauge”, this index is often seen as a reflection of perception of risk.

Silver and palladium were also among last month’s winners. Palladium, as well as other industrial metals as copper or platinum, have received a boost early September following top consumer China announcing a slew of new stimulus measures to further boost its struggling economy, following repeated lockdowns and the crisis in the property sector.

And the industrial nature of silver (about 50% is used in industrial processes, from photovoltaic panels to the automotive sector) is what is causing it to perform opposite to gold, which is instead suffering from the strength of the dollar.

The Laggards

The ranking of the worst performing ETFs in September, on the other hand, sees the Lyxor Core UK Government Inflation-Linked Bond (DR) UCITS ETF (GILI) at the top. On September 22, the Bank of England raised interest rates from 1.75% to 2.25%. Three members of the Bank voted for a rate increase of 75 basis points and it’s expected to raise rates even further in November. This, together with the £50 billion tax cut plan promised (and then withdrawn) by the new British Prime Minister Liz Truss, triggered the collapse of the pound and a massive sell-off of long-term bonds.

September also saw a cooling in the price of natural gas, hydrogen and uranium. The European real estate sector also suffered. 

It is important to keep in mind that ETCs on natural gas replicate the performance of the American gas, whose reference market is Henry Hub, which has a drag on the European situation, but is subject to different dynamics.

The Biggest

Monthly top and flop performers often coincide with very volatile and therefore risky products, which should play a satellite role in your portfolio. Below you have an overview of the biggest European-domiciled ETPs in terms of assets, which could be more appropriate to consider as core holdings. Performances in September 2022 go from -7.8% for the iShares Core MSCI EM IMI UCITS ETF (EIMI)up to the iShares $ Treasury Bond 1-3yr UCITS ETF (IBTS), which gained 3% last month.


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.

According to Morningstar data, there are about 43 percentage points between the best and worst performing Exchange-traded products (ETPs) in September, with returns for the month ranging from 28.4% to -14.6%.

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 International Editor at Morningstar.

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