ETFs focused on Chinese equities delivered the biggest returns in the first half of the year, according to ETF.com data.
“The strong performance was largely tied to a reform-minded government that has shown itself committed to do whatever it takes to grow and open up the stock market,” writes Cinthia Murphy in a ETF.com report.
ETF.com, which just released its June Midyear 2015 ETF fund flows data, reports that midyear ETF inflows set a new record of $101 billion. The data showed total U.S.-listed ETF assets stood at $2.118 trillion at the end of June—6% higher than at the end of 2014 and 14% higher than a year ago.
The big recipients of fund flows were international equities, and in particular currency-hedged strategies. The most popular ETF following that strategy has been the eurozone-focused WisdomTree Europe Hedged Equity Fund (HEDJ), which ETF.com reports has attracted $14 billion this year, bringing HEDJ’s total assets to almost $20 billion.
Performance-wise, the first half of the year went well for funds invested in mainland China equities.
Both the Market Vectors ChinaAMC SME-ChiNext ETF (CNXT), which targets 100 of the largest stocks listed on Shenzhen’s SME and ChiNext Boards, and the Deutsche X-trackers Harvest CSI 500 China-A Shares Small Cap ETF (ASHS), which tracks an index of 500 Chinese small-cap companies listed on the Shanghai and Shenzhen stock exchanges, topped the list performance-wise.
According to ETF.com, each gained upward of 61% in the last six months. ETF.com says these gains through the end of June also reflect the 20%-plus technical correction Chinese stocks faced in the second half of the month—at one point CNXT was up more than 100% this year.
Another hot performer in the past six months was health care, biotech specifically.
ETF.com found that biotech-focused ETFs were also among the best-performing ETFs in the first half of the year.
The SPDR S&P Biotech (XBI), which has $2.4 billion in assets, returned 35% through the first six months of 2015. Meanwhile, the more modest BioShares Biotechnology Products (BBP) and BioShares Biotechnology Clinical Trials (BBC) returned 34% and 30%, respectively, through June.
“These funds—tapping into one of the hottest health care segments—have benefited from several factors including the Affordable Care Act, the so-called Obamacare legislation,” writes Murphy in the ETF.com report. “The legislation has created an influx of new patients that health care companies have seen come into the fold. Adding to performance has been a wave of mergers and acquisitions, and ever-pressing demand for new drug development in the face of global scares such as Ebola.”
These were the top 10 best-performing ETFs midway through 2015, according to ETF.com:
- Market Vectors ChinaAMC SME-ChiNext (CNXT)
- Deutsche X-trackers Harvest CSI 500 China-A Shares Small Cap ETF (ASHS)
- ALPS Medical Breakthroughs ETF (SBIO)
- SPDR S&P Biotech (XBI)
- BioShares Biotechnology Products (BBP)
- BioShares Biotechnology Clinical Trials (BBC)
- iShares MSCI China Small-Cap (ECNS)
- Barclays Return on Disability ETNs (RODI)
- KraneShares Bosera MSCI China A Share (KBA)
- Market Vectors ChinaAMC A-Share (PEK)
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