Discover more from Emerging World
The World's Best Performing Emerging Markets ETFs 2021 - Saudi Arabia Tops the List (Globally Too)
Midway through 2021, the top EM country equity returns: Saudi Arabia, Vietnam, Russia, Taiwan, and the UAE. The worst performer? Turkey. Top Exchange: ADX Abu Dhabi. Hottest investment: Commodities.
It’s that time of year.
We’re at the midway point. The first half of the year is behind us. It’s halftime of 2021, and a good time to do a check on markets.
I was going to write a column about the winners and losers in emerging markets equities, but as I looked closer at the numbers, I realized that the numbers tell the story. So, in lieu of this week’s column, here’s a series of Top Ten lists (and one Top 15 list) that tell us how emerging markets country indexes, thematic indexes, and commodities performed - with thanks to Seeking Alpha and JustETF.com and CountryEconomy.com.
I also looked at leading EM and global indexes not tied specifically to ETFs. The top index performer globally, year to date? The Abu Dhabi Stock Exchange (ADX) Index, with a 36.75% return. Broader UAE stocks also performed well, but not as well as Saudi Arabia and, surprisingly, the Amman Stock Exchange (ASE Amman) and the VNINDEX of Vietnam.
I used Seeking Alpha’s ETF tracker to look at key country and thematic indexes, and I used JustETF.com to look at a broader set of country ETFs.
Saudi Arabia comes out on top in 2021 with the best performing emerging market ETFs, according to JustETF.com. In terms of broader indexes, Saudi Arabia’s TASI comes in fourth behind ADX Abu Dhabi, VNINDEX Vietnam, and ASE Amman.
One of the simplest ways to invest in emerging markets for the retail investor remains ETFs. The top four specific emerging market country ETFs at the midway 2021 point, according to Seeking Alpha? Saudi Arabia, Russia, Taiwan, and the UAE, in that order. All four of the main ETF’s tracking those countries as reported by Seeking Alpha returned more than 20% in the first half of the year.
As for Russia, you can’t say we didn’t tell you so. Ok, what I mean is that the very sharp Malcolm Dorson told us so in an interview with Emerging World back in January - Top EM Fund Manager Says Go Long Russia for 2021. It was a strong call, and we were glad to report it. In fact, it was very early in our Emerging World journey and we remain grateful to Malcolm for the extensive interview.
Malcolm also recently shared with me Mirae Asset Global Investments 2021 Mid-Year Emerging Markets picks. They like:
As for the general global markets recovery for 2021, we also previewed that in these pages. Here’s what the always astute strategist and our friend Mike O’Sullivan told us at Emerging World back in January 2021 - Michael O’Sullivan on Markets and Politics.
“The year 2021 should bring us a classical cyclical recovery until about June. U.S households are cash-rich and the Chinese economy has benefited from controlling Covid early on. There will be pent-up demand and spending will pick up. Markets will move, but the big question is this: will we see inflation?”
But, what about the top EM thematic indexes? India Small Cap (SMIN) topped the list with a 28.9% 1H return, followed by China Energy (CHIE) at 21.8%, and EM Small Cap (EWX) at 18.5%.
As for commodities, the bull run saw some whopping returns in 1h 2021. A general US Oil ETF topped the list (USO) with 53.9% returns, followed by Brent Oil (BNO) at 51.2%, and Biofuels (BFO) at 51%. We’ve shared many articles about the Commodities Supercycle
Below, you’ll see a list of the Top Ten ETF performers in these three categories - Country, Theme, and Commodities — and you will also see the Top 15 market index performers worldwide. EM’s and Emerging Europe dominate the list.
The Top Fifteen Indexes Worldwide (Returns YTD, 2021)
ADX Abu Dhabi - 36.75%
VNINDEX Vietnam - 28.66%
ASE Amman - 27.5%
TASI Saudi - 26.35%
SBI Top Slovakia - 25.48%
ATX Austria - 24.9%
OMX Tallin Estonia - 24.59%
KASE Kazakhstan - 24.44%
MERVAL Argentina - 23.63%
Sofix Bulgaria - 23.07%
ICEX Iceland - 23.01%
OMXS 30 Sweden - 22.09%
BET Romania - 21.74%
UX Ukraine - 20.32%
TAIEX Taiwan - 20.2%
Top Performing Emerging Market Country ETFs (1H 2021 YTD)
Saudi Arabia (KSA) - 27.5%
Russia (RSX) - 20.5%
Taiwan (EWT) - 20.3%
United Arab Emirates (UAE) - 20.2%
Vietnam (VNM) - 19.3%
Mexico (EWW) - 11.6%
South Africa (EZA) - 10.9%
India (PIN) - 10.6%
Greece (GREK) - 10.2%
Nigeria (NGE) - 9.5%
Saudi Arabia and Vietnam - Top Two Global Equity Markets
A separate source, JustETF.com, looks at a different set of ETF indexes, and Saudi Arabia still comes out on top in emerging markets - and globally, with Vietnam emerging in second place both in EM and globally.
Here’s the JustETF.com Top Ten Equity Markets Global List for 1H 2021
India Small Cap Leads the Charge
As for thematic indexes, India small cap was the strongest player in 1H 2021 ETFs
Top Performing Emerging Market Thematic Index ETFs (1H YTD 2021)
India Small Cap (SMIN) - 28.9%
China Energy (CHIE) - 21.8%
EM Small Cap (EWX) - 18.5%
Frontier Countries (FM) - 17.5%
China Healthcare (KURE) - 17.4%
Brazil Small Cap (EWZS) - 16.7%
China Industrials (CHII) - 14.2%
EM Small Caps (DGS) - 14.0%
Brazil Mid Cap (BRF) - 13.3%
India Consumer (INCO) - 12.4%
Oil, Commodities ETFs Sizzle in 1H 2021
Top Performing Commodities ETFs (1H YTD 2021)
Oil (USO) - 53.9%
Brent Oil - 51.2%
Biofuels (FUE) - 51%
Gasoline (UGA) - 48.6%
Energy (DBE) - 44.9%
Natural Gas (UNG) - 39%
Steel (SLX) - 38.1%
Corn (CORN) - 37%
Goldman Sachs Commodities Index (GSG) - 31.5%
Grains (GRO) - 28.0%
Source: Seeking Alpha Commodity ETFs
Turkey’s Rough First Half and the Other Laggards
Finally, the Emerging Markets laggards for 2021
Here’s the top 5 worst performers of major EM ETFs, according to Seeking Alpha from worst to, well, best of the worst - in order below. They range from -19.3% for Turkey to -11.6% for Malaysia.
Beaten down value for the rest of the year? We’ll talk to some of the leading minds on this soon.
Meanwhile, we may be at the mid-way point in 2021, but we’ve got a long line of ideas, interviews, and columns in the pipeline for the second half of the year over here at Emerging World. As always, we are delighted to hear from you, so please reach out with ideas, tips, thoughts, photos, or anything Emerging World-ish.
We are building some nice momentum of new fellow travelers (subscribers). If you found this post useful, and if you enjoy the daily emerging markets round-ups, the weekly Emerging World column, and the occasional thought leader interviews, please spread the word and…
My warm regards,