2 ETF funds that remained on top for 10 years

2 investment funds are the only ETFs in the world to have achieved a positive return every year for the last decade.

These two funds stood out among 8,300 equity ETFs worldwide according to FactSet data.

These are the Amundi ETF MSCI Europe Healthcare UCITS ETF, listed on the London Stock Exchange, and the iShares S&P/TSX Capped Consumer Staples Index ETF, which have generated gains for investors from 1 January 2014 to 31 December 2023.

The Amundi fund recorded its tenth consecutive year of positive return in 2023.

Over this period, the ETF has more than doubled investors’ capital, with a cumulative total price gain of 118%. Furthermore, it outperformed the pan-European benchmark Stoxx 600 index by more than 70 percentage points in terms of price return.

The healthcare ETF’s stable performance can be attributed to pharmaceutical stocks, which make up about 80% of the MSCI Europe Healthcare index that the fund tracks, according to Joakim Tabet, economist and strategist at Kepler Cheuvreux.

Tabet explained that European pharmaceutical companies are a defensive sector: this suggests that demand for pharmaceutical products is less sensitive to economic cycles than other sectors. Additionally, large pharmaceutical companies offer earnings visibility through patent protection and drug regulation around the world.

The ETF, valued in British pounds, posted significant gains on three occasions when the MSCI Europe Health Care Index had negative returns due to currency fluctuations, according to Vincent Denoiseux, head of investment strategy at Amundi ETF.

Novo Nordisk, which represents 20% of the index, has contributed significantly to the ETF’s share price performance over the past year thanks to its new blockbuster anti-obesity drug, Wegovy.

Very high expectations may have boosted Novo Nordisk’s valuation, but outside of the Danish drugmaker, Tabet believes the rest of the pharma sector still has fairly balanced valuations with solid fundamentals.

Kepler Cheuvreux takes a neutral view on the sector due to low volatility and defensive characteristics at a time when the US economy is expected to slow significantly, due to high interest rates.

However, Tabet also highlighted that the healthcare sector, particularly European pharmaceuticals, tends to underperform in election years. His observations are based on the last three US election cycles in 2020, 2016, and 2012.

“I think the reputation of the pharmaceutical industry has improved in the eyes of the American public since Covid,” Evans said.

“I think logically there is less political gain in attacking drug companies now than in the past.”

Disclaimer The information and considerations contained in this article should not be used as the sole and principal basis on which to make investment decisions. The reader maintains full freedom in his own investment choices and full responsibility in making them, since he alone knows his risk appetite and his time horizon. The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation for public savings.

Original article published on Money.it Italy 2024-03-07 07:15:00. Original title: Due fondi ETF imbattibili da dieci anni