Interactive Investor

ETF star performers of 2020

16th December 2020 09:21

Tom Bailey from interactive investor

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We run through some of the star performing ETFs of 2020, including two that would have doubled your money. 

One of the best-performing ETFs in 2020 was the iShares Global Clean Energy ETF (LSE:INRG), a member of interactive investor’s ACE 40. Dated from the start of the year to 11 December, the ETF returned slightly over 100% (total return, in sterling terms, according to data from FE Analytics, as all subsequent returns cited will be). 

The ETF has generally performed well for much of the year. However, it was given an extra lift by the election of Joe Biden in November. Biden is seen as likely to provide large subsidies to the renewable energy sector. In particular, the new president is expected to bring the US back into the Paris Climate Agreement and agree to achieving net-zero carbon emissions by 2050.

Another star performer was the WisdomTree Cloud Computing ETF (LSE:WCLD), returning almost 100%. Being equal weighted, the ETFs biggest holding is currently Cloudflare (NYSE:NET), a US web infrastructure and security company, which has seen its share price go up by more than 300% this year. Also in the ETF’s top 10 holdings is Zoom (NASDAQ:ZM), the video conferencing company, which has appreciated by almost 500% since January.

Overall, 2020 was a good year to invest in US tech. However, it was also highly profitable to have exposure to Chinese tech firms. The KraneShares CSI China Internet ETF USD (LSE:KWEB), for instance, returned investors around 57%. The ETF is full of  large Chinese tech companies, including Alibaba (NYSE:BABA), Tencent (SEHK:700) and Baidu (NASDAQ:BIDU).

However, providing even stronger performance was the EMQQ Emerging Mkts Internet & Ecommerce ETF (LSE:EMQQ), returning investors just over 76%. This ETF provides exposure to leading internet and e-commerce companies serving emerging markets. Inevitably this means having a large exposure to Chinese firms, with its latest factsheet showing more than 60% exposure to China.

Another tech ETF that stood out in 2020 was the HAN-GINS Tech Megatrend Equal Weigh ETF (LSE:ITEK), returning 52%. The ETF tracks an equal weighted index of global tech stocks.

The strong performance of global tech was also felt in thematic ETFs, several of which experienced very strong performance this year.

One notable example was the Invesco Elwood Global Blockchain Equity UCITS ETF (LSE:BCHN), which returned just over 71%. The ETF uses the Elwood Blockchain Global Equity index to track a basket of companies deemed to have the “potential to participate in the blockchain ecosystem”.

The strong performance of the ETF may partly be related to the strong performance of bitcoin this year, with the cryptocurrency being based on blockchain technology. However, the ETF includes several more conventional tech names. For instance, among its top 10 holdings are Taiwan Semiconductor Manufacturing (NYSE:TSM) and Samsung (LSE:SMSD).

The VanEck Vectors Video Gaming & eSports ETF (LSE:ESPO) was another outstanding ETF, returning investors roughly 78%. Focused on video gaming, its portfolio has several notable tech names, with its biggest holding being Tencent.

The battery theme also excelled in 2020, most notably with the L&G Battery Value-Chain ETF (LSE:BATT) returning just over 70%. As you might expect, the ETF has a decent weighting to Tesla (NASDAQ:TSLA), which is up by more than 600% since the start of the year. However, its largest holding is Galaxy Resources (ASX:GXY), an Australian mining company that has roughly doubled in price this year.

Several thematic ETFs from L&G Investment Management did well this year. Alongside the battery ETF, L&G Artificial Intelligence ETF (LSE:AIAI) was another strong performer, returning investors more than 60%. Meanwhile, L&G Healthcare Breakthrough ETF (LSE:DOCT) returned around 59%.

  • An earlier version of this article attributed a return of roughly 100% to First Trust Dow Jones Internet ETF A USD (LSE:FDNU). These performance figures were actually for First Trust Dow Jones International Internet ETF (LSE: FDNI). FDNU returned roughly 50% year-to-date. 

The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this data may not be suitable for all investors and, if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. 

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