Over the month of May, VanEck’s new data shows top-performing exchange-traded funds (ETF) have included those focused on Ethereum, uranium and crypto/tech, while year to date gold miners, global defence and video games ETFs are the front-runners.
Namely, in May, the top three ETFs for monthly performance were all focused on Ethereum: Global X 21Shares Ethereum ETF (46.7 per cent), Monochrome Ethereum ETF (45.3 per cent) and Betashares Ethereum ETF (43.2 per cent).
This marks a sharp turnaround compared to just three months ago, when all three funds ranked among the worst performers in February.
At the time, the Monochrome Ethereum ETF fell 19 per cent, followed closely by the Global X equivalent, which dropped 18.2 per cent. The Betashares Ethereum ETF also posted negative returns, declining 13.9 per cent and ranking as the eighth-worst performer for the month.
A further four funds among the worst performers in February were invested in bitcoin assets, all of which lost more than 15 per cent each.
However, the strong recent performance of these ETFs has yet to translate into significant net inflows, with none of the funds appearing in the top 10 for monthly flows. Still, VanEck noted that cryptocurrency ETFs, as a whole, attracted $27.8 million in inflows over the month.
Regarding ETFs that achieved poor performance during May, Global X Ultra Short Nasdaq 100 Hedge Fund topped the chart by losing 18.7 per cent, followed by the Betashares US Equities Strong Bear Currency Hedged Complex ETF which lost 13.4 per cent.
These funds had returned 20.2 per cent and 14.1 per cent, respectively, back in March.
Commenting on the rotation in the top 10 chart, VanEck said: “We have observed a lot of swings between the top and bottom 10 performers of this year. For May, Ethereum, uranium and crypto/technology took the lead after being the bottom performers in February and March. Meanwhile, many of last month’s leaders – specifically, funds bearish on US assets – dropped to the bottom 10 for this month.”
Moreover, the ETF provider cited a “disconnect between performance and net flows can be seen in May”, alongside another key trend – a marked increase in flows to high-yield income options across fixed income and equities.
Overall, in May, the Australian ETF industry saw funds under management (FUM) increase by $14.4 billion to an all-time high of $273.2 billion.
This, according to VanEck, represents the 11th consecutive month of $3 billion+ net flows.
“While flows have been softer this month, the bounceback in markets has added more than $10 billion to funds under management – the most month-on-month growth in the year to date,” the ETF provider said.
Looking at performance year to date, VanEck said global defence – a relatively new entrant to the ETF industry – has quickly proven its merit in the current environment of elevated geopolitical risk.
“Several defence stocks common across the Australian-domiciled global defence ETFs have experienced triple-digit growth over the last 12 months, significantly outpacing the growth of the once unbeatable ‘Magnificent 7’,” VanEck said. “We are designating this group of global defence stocks as the ‘Titan 5’.”
