Let’s analyze in detail 1 ETF which increased by 40% in the last 3 years: what is this product about?
In our analysis of the ETF universe, we highlight a fund that achieved an impressive 40% return over the past three years.
The fund has a size of approximately EUR 400 million and offers investors the opportunity to diversify their portfolio by investing in a wide range of securities from a specific geographical area.
In this article, we will delve deeper into this financial success, carefully examining every aspect of the product, performance, costs, and structure. It’s time to uncover the secret behind the ETF that has grabbed attention for its performance.
The Amundi MSCI Emerging Markets Latin America ETF
The Amundi MSCI Emerging Markets Latin America UCITS EUR (C) ETF is a passively managed fund that aims to replicate the performance of the MSCI Emerging Markets Latin America index. This ETF was launched on March 22, 2018, with a stable history with a 5-year track record.
The fund has a size of approximately EUR 400 million, making it one of the largest ETFs tracking the MSCI Emerging Markets Latin America index. The product offers investors the opportunity to diversify their portfolio by investing in a wide range of equities from emerging Latin American countries.
The total expense ratio (TER) of this ETF is 0.20% per annum. This value represents the total costs of running the ETF, including ongoing management costs, and is relatively low compared to some other similar products on the market. A low TER is good for investors, as it means a smaller percentage of returns are eroded by management fees.
Distribution Policy
This ETF uses a synthetic replication through an "unfunded swap" strategy to track the performance of the MSCI Emerging Markets Latin America index. This means that instead of physically purchasing all the securities that make up the index, the ETF uses financial contracts to replicate their performance. Synthetic replication, compared to total physical replication, allows less tracking, but helps lower product costs. The dividends generated by the underlying instruments are accumulated and reinvested in the ETF, thus following an accumulation policy.
Historical performance
One of the most important aspects to consider when evaluating an ETF is its historical performance. Over the last 12 months, this ETF has yielded +7.33%, which is a positive result and reflects the performance of Latin American emerging markets over the period. However, it is important to note that past performance does not guarantee future returns and that investments in emerging markets may be subject to greater volatility.
Over the last 5 years, the ETF has had an overall return of +22.15%, with a maximum return of +49.80% over the last 3 years. Interestingly, in 2020, the ETF recorded a significant loss of -21.48%, which reflects the market turbulence caused by the COVID-19 pandemic. However, in the following years, the ETF managed to recover and achieve positive returns.
Risk and Volatility
Investing in emerging markets involves a certain degree of risk, and this ETF is no exception. The 1-year volatility was measured at 19.72%, which indicates that the fund is subject to relatively high price fluctuations in the short term. However, the 5-year long-term volatility is higher at 27.49%, reflecting the more volatile nature of emerging markets over the long term.
The reward-to-risk ratio is an important metric to consider, and at 1 year, this ETF has a reward-to-risk of 0.37, suggesting a balance between return and volatility. However, at 3 and 5 years, the reward/risk ratio is lower, which indicates greater volatility compared to the returns obtained in the medium and long term.
Maximum drawdown
The maximum drawdown represents the maximum loss experienced by the ETF over a given period of time. In the case of this ETF, the maximum drawdown for 1 year was -12.09%, for 3 years it was -21.67%, and for 5 years it was -51.62%. The maximum drawdown since launch was -52.87%. This data indicates that the ETF has experienced periods of significant losses over its period of activity, which is common in emerging markets.
Conclusion
In summary, the Amundi MSCI Emerging Markets Latin America UCITS EUR (C) ETF offers investors an opportunity for exposure to emerging markets in Latin America through a competitive cost structure. However, it is important to consider the volatility and risk associated with this type of investment, especially over the long term. Its historical performance has been mixed, but it is important to note that the performance of emerging markets can be influenced by a number of macroeconomic and geopolitical factors. Therefore, investors should consider their risk tolerance before deciding whether this ETF suits their long-term investment needs.
| 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 for public savings. |
Original article published on Money.it Italy 2023-11-15 18:07:14. Original title: Questo ETF ha avuto un rendimento del 40% in 3 anni
