Exchange-traded funds (ETFs) which track emerging markets and Australian stock indices provided investors with the best returns among locally listed ETFs in 2009.
The iShares MSCI BRIC (Brazil, Russia, China and India) ETF, whose top holdings include energy giant Gazprom and Bank of China, was the top performer in the 12 months, surging 47.18 per cent.
The iShares Taiwan ETF rallied 37.45 per cent as the nation’s trade relations with China improved. The broader MSCI Emerging Markets ETF added 33.18 per cent.
“The whole move last year was a move back to risk assets and one of the riskiest assets are emerging markets equities,” PennyWise Investment managing director David Bassanese said.
Another element behind emerging markets equities’ strong performance was that their economies weren’t as badly affected by the financial crisis as the United States, Europe and Japan, he said.
PennyWise develops model portfolios comprising ETFs for financial advisers and self-managed superannuation funds.
Australia and Singapore ETFs led gains among ETFs that track advanced economies. The SPDR S&P/ASX 200 and iShares MSCI Singapore ETFs jumped 36.94 per cent and 33.76 per cent in 2009, respectively.
ETFs tracking indices in other major developed markets underperformed or lost value as the Australian dollar rebounded from a low of around 64 cents in early 2009.
The iShares S&P MidCap 400 ETF of US stocks added 6.38 per cent, while the iShares S&P Europe 350 ETF advanced 4.11 per cent.
The iShares S&P 500 ETF shed 2 per cent while the ETF Securities Physical Gold lost 3.80 per cent in 2009.
The worst-performing ASX-listed ETF in 2009 was the iShares MSCI Japan, which slumped 18.41 per cent.
ETFs trade exactly like common shares and are generally designed to replicate the performance of an index.
