Here are the ETFs that skyrocketed in the first half of the year and those that suffered.
The second quarter of 2024 offered an interesting look at ETF market dynamics, highlighting both winners and losers amid economic and political volatility. Semiconductor ETFs and some emerging markets have shown remarkable resilience, while sectors such as clean energy and some Latin American markets have faced significant challenges.
Semiconductor Domain
Semiconductors continued to show extraordinary strength in the second quarter. The Amundi MSCI Semiconductors ESG Screened UCITS ETF (SEMG), with significant exposure to Nvidia, rose 18% in the quarter. This success was fueled by the exceptional growth of Nvidia, which saw its revenues rise to $26 billion thanks to growing demand in the artificial intelligence sector.
Other ETFs that have benefited from the expansion into the semiconductor sector include the Invesco US Technology Sector UCITS ETF (XLKQ) and the iShares S&P 500 Information Technology Sector UCITS ETF (IITU), which have increases of 14.1% and 13.7% respectively.
Additionally, the strong performance of Taiwan Semiconductor Manufacturing Company (TSMC) has given further impetus to ETFs that focus on Taiwan, such as the HSBC MSCI Taiwan Capped UCITS ETF (HTWN) and the iShares MSCI Taiwan UCITS ETF (ITWN), which recorded increases of more than 13%.
Focus Amundi MSCI Semiconductors ESG Screened UCITS ETF (SEMG)
The Amundi MSCI Semiconductors ESG Screened UCITS ETF Acc represents a prominent investment option for those looking to access the semiconductor industry through a sustainability lens. Managed by Amundi, this ETF tracks the MSCI ACWI Semiconductors & Semiconductor Equipment ESG Filtered Index, which includes large- and mid-cap companies active in the semiconductor and semiconductor equipment sector across 23 developed and 24 emerging markets.
The peculiarity of this index is its ESG filter, which selects companies based on environmental, social, and governance criteria. This approach is reflected in the fund’s focus on sustainability, an increasingly critical consideration for modern investors. The ETF has total assets under management of approximately €416 million and offers a full physical replication model, purchasing all components of the index to faithfully reflect its performance.
With a total annual fee of just 0.35%, the ETF is positioned as an economical choice for accessing a crucial technology sector. The dividends generated are accumulated and reinvestedi, allowing compound growth over time. This reinvestment strategy can be especially beneficial in a high-growth industry like semiconductors.
The ETF has demonstrated annual volatility of 29.47%, a reflection of the dynamics of the technology sector, which can be subject to rapid change and innovation. Top holdings include industry giants such as NVIDIA, Taiwan Semiconductor Manufacturing Co., Broadcom, and ASML, which together make up a significant percentage of the index.
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Technology Stimulates the Turkish Market
Another geographic sector that indirectly benefited from the technology boom was the Turkish market. The Amundi MSCI Turkey UCITS ETF (TUR) and the iShares MSCI Turkey UCITS ETF (ITKY) surprised with returns of 21.6% and 20.8%, respectively. This increase was driven by the strong presence of technology companies and rising inflation, which pushed investors into the stock market.
Descent of Latin American ETFs
By contrast, in Latin America, ETFs performed disappointingly. The iShares MSCI Mexico Capped UCITS ETF (CMXC) and the presidential elections in Mexico. Brazilian ETFs and other Latin American ETFs also suffered, highlighting the fragility of emerging markets in a time of global economic uncertainty.
Difficulties in the Clean Energy Sector
The clean energy sector also continued to struggle. The VanEck Rare Earth and Strategic Metals ETF (REMX) saw the biggest decline with a decline of 17.3%. ETFs focused on solar and batteries, such as the Global X Solar UCITS ETF (RAYZ) and the Global X Lithium & Battery Tech UCITS ETF (LITU), also suffered significant losses.
These declines can be attributed to persistent inflation and high interest rates, which have particularly penalized capital-intensive industries, such as those related to renewable energy. Furthermore, political uncertainty in the United States has added another layer of complexity, with threats to the Inflation Reduction Act from former President Trump.
Conclusions
The second quarter of 2024 vividly illustrated how different industries and regions can react to distinct market dynamics. While semiconductors and some emerging markets have benefited from specific favorable conditions, sectors such as clean energy and Latin American markets have faced significant headwinds. These trends offer valuable insights for investors seeking to navigate the complexity of the global ETF landscape.
|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 retains 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 to public savings.|
Original article published on Money.it Italy 2024-07-14 09:37:00. Original title: Gli ETF più performanti nel primo semestre 2024
