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Thematic ETFs top the 2020 charts


  • Bitcoin tracker is the best performing ETF of 2020, excluding explicitly leveraged products
  • Thematic ETFs in technology and clean energy top the charts
  • Traditional energy ETFs bring up the rear

Laith Khalaf, financial analyst at AJ Bell, comments:

“Bitcoin has been on the rampage this year, and consequently so has the XBT Bitcoin Tracker ETF, which tops the performance table. However we have been here before, and the last time Bitcoin surged towards a record high, it promptly fell back down to earth with a great big bang. Bitcoin is subject to wild price movements, so anyone thinking of investing in this area should do so with a very small amount of money that they can afford to lose. In a world where the existing currency system is highly digitalised, it’s hard to see where Bitcoin can score an edge, particularly when its volatility inhibits use in the wider economy for regular payments such as wages and bills.

“The iShares Global Clean Energy fund has also done well this year, thanks to a groundswell of interest in renewable energy. This is of course in part a result of global attention on the issue of carbon emissions, and partly thanks to Joe Biden’s promise to push a $400 billion clean energy spending plan through Congress. The renewable energy theme is one which looks like it has legs, as governments around the world seek cleaner ways to generate power to try to limit climate change. At the same time, increasing flows of money are being directed towards companies with strong ESG credentials, which should also help to buoy share prices.

“On the flip side of that particular coin are traditional forms of energy, which bring up the rear of the ETF performance table. While the switch to renewable energy casts a longer term shadow over the prospects for carbon-based fuels, poor performance over 2020 was down to a drop in demand, as large parts of the global economy shut down to keep the pandemic at bay. As we move into spring, we should see the year-on-year price changes for fuels improve, as the sharp drop in March and April of 2020 fall out of the equation. However fuel ETFs don’t necessarily make for good long term investments, even if the price of the underlying commodity rises, because the cost of rolling from one futures contract onto the next one can stack up over time.

“Thematic ETFs are handy options for investors who want to get access to particular themes they see playing out in the global economy, but they function like active funds in two important aspects. The first is that the construction of the index they track is a key determinant of returns, so in the same way active investors need to get comfortable with a fund manager’s investment approach, thematic ETF investors need to look under the bonnet at the index driving their thematic ETF. Secondly, thematic ETFs tend to be more expensive than plain vanilla ETFs tracking traditional indices, as a result of their more specialised nature. So thematic ETF investors do need to spend time researching their investment in a way that is more closely aligned with active, rather than passive, fund selection.”


ETF % growth
Bitcoin Tracker One XBT Provider 155.9
db Physical Rhodium 148.8
iShares Global Clean Energy 103.0
WisdomTree Cloud Computing 97.9
Market Access NYSE Arca Gold BUGS Index 83.7
VanEck Vectors Video Gaming and eSports 79.1
EMQQ Emerging Markets Internet & Ecommerce 76.3
Invesco Elwood Global Blockchain 71.9
L&G Battery Value-Chain 71.2
WisdomTree Artificial Intelligence 66.9

Source: Morningstar total return YTD to 11/12/2020, excluding explicitly leveraged products


ETF % growth
db Brent Crude Oil Booster Euro Hedged -29.6
Xtrackers MSCI USA Energy -29.6
WisdomTree Gasoline -36.1
WisdomTree Lean Hogs -39.0
WisdomTree Heating Oil -40.6
WisdomTree Natural Gas -40.6
WisdomTree Energy -42.5
WisdomTree Petroleum -42.9
WisdomTree WTI Crude Oil -54.1
WisdomTree Brent Crude Oil -59.1

Source: Morningstar total return YTD to 11/12/2020, excluding explicitly leveraged products


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