Top 5 ETFs of 2024 between challenges and opportunities

In the first 5 months of 2024, global financial markets saw a series of significant swings, but not all financial instruments emerged with broken bones. In particular, some ETFs have recorded surprising performances, capturing the attention of investors.

This article examines the 5 ETFs that shone in the first six months of the year, assessing whether they represent an investment opportunity or whether they could hide potential risks ahead of the second half of the year. We will analyze in detail their performance, replication strategies, and the factors that contributed to their success.

1. Amundi MSCI Turkey UCITS ETF Acc: +43.93%

One of the ETFs that has performed exceptionally is the Amundi MSCI Turkey UCITS ETF Acc, which tracks the MSCI Turkey index. This index represents Turkish large- and mid-cap companies, offering a comprehensive overview of the Turkish stock market. To date, this ETF has achieved a return of +43.93%, standing out as one of the most profitable in the global ETF landscape.

The success of this ETF is linked to several factors:

• First, Turkey’s economic recovery has exceeded expectations, fueled by structural reforms and an increase in investor confidence.
• Additionally, inflation, which has long been a problem for the Turkish economy, has shown signs of slowing, helping to stabilize the stock market.

The Amundi MSCI Turkey UCITS ETF Acc, with a total expense ratio (TER) of 0.45% per annum, is also one of the cheapest ETFs available, increasing its attractiveness to investors.

The ETF synthetically replicates the performance of the underlying index through a swap, which means it does not directly own Turkish stocks, but replicates their performance through financial contracts. The ETF, which accumulates and reinvests dividends, manages assets of approximately €129 million and is based in Luxembourg, with a launch date dating back to 11 August 2006.

2. HANetf Sprott Copper Miners ESG Screened UCITS ETF USD Acc:+42.20%

Another ETF that has shown notable growth is the HANetf Sprott Copper Miners ESG Screened UCITS ETF USD Acc, which tracks the Nasdaq Sprott Copper Miners ESG Screened index. This index tracks global companies engaged in copper exploration, mining, and refining, with an eye to ESG (environmental, social, and governance) criteria.

To date, the ETF has returned +42.20%. Growing interest in commodities, particularly copper, has been a major driver of its performance. Copper, essential for the renewable energy industry and technological infrastructure, has seen constantly growing demand, also driven by global energy transition policies.

This ETF is one of a kind, being the only one to replicate the Nasdaq Sprott Copper Miners ESG Screened Index, and adopts a full physical replication strategy, purchasing all components of the index. Its TER is equal to 0.59% per annum, and it manages assets of 6 million euros. The ETF, which accumulates and reinvests dividends, was launched on 6 December 2023 and is tax domiciled in Ireland.

Investors are attracted not only by the growth prospects of the copper sector but also by the emphasis on ESG criteria, which represent added value in a context where sustainability is increasingly important. However, the ETF carries risks related to commodity price volatility and exchange rate fluctuations, as it is denominated in USD without currency hedging.

3. Amundi MSCI Semiconductors ESG Screened UCITS ETF Acc:+38.92%

Another ETF that has seen notable performance in the first part of 2024 is the Amundi MSCI Semiconductors ESG Screened UCITS ETF Acc. This ETF tracks the MSCI ACWI Semiconductors & Semiconductor Equipment ESG Filtered index, which includes large-scale companies and mid-cap companies active in the semiconductor industry in developed and emerging markets. This ETF’s YTD performance was +38.92%, making it an attractive choice for investors focused on technology and sustainability.

The semiconductor sector has seen strong demand, fueled by increasing digitalization and the adoption of advanced technologies such as artificial intelligence and the Internet of Things (IoT). Additionally, the ESG criteria applied in the index filter companies based on environmental, social, and governance standards, adding an additional layer of appeal for sustainability-minded investors.

With a TER of 0.35% per annum, the Amundi MSCI Semiconductors ESG Screened UCITS ETF Acc is one of the cheapest ETFs in the technology sector. This ETF uses full physical replication, directly purchasing all index components, and reinvests the dividends. The ETF manages assets of approximately €294 million and is based in Luxembourg, having been launched on 28 March 2007. The annual volatility of 26.20% reflects both the opportunities and risks associated with this dynamic sector.

4. Global X Copper Miners UCITS ETF USD Accumulating: +36.54%

The Global This ETF tracks the Solactive Global Copper Miners Index, which tracks global companies engaged in copper exploration, mining, and refining. Copper is an essential metal for renewable energy and technology infrastructure, and its demand continues to grow significantly.

The ETF adopts a full physical replication strategy, purchasing all index components, with a TER of 0.65% per annum. This makes it slightly more expensive than other ETFs, but its performance has justified the cost. It manages assets of €147 million and is tax-domiciled in Ireland, having launched on 22 November 2021.

The growing demand for copper, driven by green infrastructure projects and the expansion of sustainable technologies, has contributed to the success of this ETF. However, investors must consider risks associated with commodity price volatility and currency fluctuations as the ETF is USD-denominated without currency hedging.

5. Amundi Euro Stoxx Banks UCITS ETF Acc:+29.65%

Finally, the Amundi Euro Stoxx Banks UCITS ETF Acc had a solid performance with a YTD return of +29.65%. This ETF tracks the EURO STOXX Banks index, which represents the eurozone banking sector. After years of low performance, the banking sector has seen a recovery thanks to rising interest rates and economic stabilization in the region.

The ETF has a TER of 0.30% per annum, making it very cost competitive. It adopts total physical replication, directly purchasing the index stocks, and reinvests the dividends. With assets under management of 1,307 million euro, it is one of the largest and most stable ETFs on the market. It was launched on 12 December 2013 and has tax domicile in Luxembourg.

In conclusion, while these ETFs have shined in H1 2024, it is essential to evaluate both the opportunities and associated risks carefully. Diversification and careful analysis of market conditions remain key to making informed investment choices.

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 2024-05-27 16:01:00. Original title: I Top 5 ETF del 2024 (fino ad oggi), tra sfide e opportunità