We’ve
already
looked
at
the
best-
and
worst-performing
funds
and
trusts
of
2023;
now
we
continue
this
period
of
retrospection
with
a
look
at
exchange-traded
funds
(ETFs)
last
year.
We
can
now
reveal
that
cryptos
and
digital
assets
topped
the
performance
list
of
ETF
themes
both
last
month
and
throughout
2023.
Top
Performing
2023
ETFs
in
Europe
With
a
stunning
255%
return,
the
top
exchange-traded
product
(ETP)
of
2023
was
the
VanEck
Crypto
&
Blockchain
Innovators
ETF
A
USD
Acc
(DAPP).
This
was
closely
followed
by
another
three
ETF
exposed
to
blockchain,
including
the
Global
X
Blockchain
UCITS
ETF
USD
Acc
(BKCH).
Indeed,
with
the
exception
of
two
trackers
exposed
to
the
semiconductor
industry
and
one
thematic
strategy
on
the
metaverse
(all
of
them
at
the
bottom
of
the
top
performer
list),
the
whole
ranking
is
dedicated
to
digital
assets
and
cryptocurrencies.
The
past
year
has
seen
the
resurgence
of
crypto,
with
Bitcoin
(BTC)
up
almost
160%.
At
the
time
of
writing
it
is
currently
priced
at
$45,339
(£35,657). There’s
also
some
altcoins
in
the
ascendancy,
of
which
Solana
(SOL)
is
the
front
runner,
gaining
around
1,000%.
Meanwhile,
progress
is
being
made
on
the
Securities
and
Exchange
Commission’s
(SEC)
approval
of
the
first
spot
ETF
on
Bitcoin
in
the
US.
In
December,
the
SEC
reportedly
met
with
representatives
of
at
least
seven
companies
that
intend
to
launch
spot
ETFs
on
Bitcoin
in
early
2024,
including
BlackRock,
Grayscale
Investments,
ARK
Investments
and
21Shares.
Many
crypto
investors
also
believe
the
launch
of
such
a
product
would
open
the
door
to
institutional
investment
and
be
a
bullish
catalyst
for
the
market.
For
the
time
being,
US
authorities
have
approved
several
ETFs
trading
futures
contracts
on
Bitcoin
and
Ethereum
but
have
so
far
repeatedly
rejected
applications
for
spot
ETFs.
The
SEC
argues
spot
crypto
ETFs
are
unsafe
for
investors
due
to
the
market’s
vulnerability
to
manipulation
and
volatility.
Speculation
is
now
rife
the
US
regulator
is
on
the
verge
of
shifting
its
policy,
however.
Bottom
Performing
2023
ETFs
At
the
other
end
of
the
performance
scale,
the
laggards
of
2023
include
instruments
exposed
to
natural
gas
and
industrial
metals
like
rhodium,
nickel,
and
palladium.
The
US
natural
gas
market
(Henry
Hub)
has
been
pushed
down
by
record
production
and
forecasts
of
mild
weather
this
autumn,
which
kept
heating
demand
low
and
allowed
utilities
to
continue
injecting
gas
into
storage.
Even
Europe,
where
stocks
are
at
capacity,
will
have
to
deal
with
a
possible resurgence
in
energy
prices this
winter.
For
its
part,
rhodium
is,
along
with
iridium,
the
rarest
non-radioactive
metal
on
Earth,
and
its
value
is
closely
linked
to
the
automotive
industry.
Production
is
being
affected
by
political
and
industrial
dysfunction
in
South
Africa,
where
83%
of
the
world’s
output
is
concentrated.
Rhodium
is
used
in
catalytic
converters
for
petrol
and
diesel
cars,
aircrafts,
and
nuclear
reactors.
Finally,
solar
stocks
suffered
overall
last
year,
but
they
did
bounce
back
slightly
in
December.
Despite
the
boom
of
solar
energy,
especially
in
Europe,
solar
companies
have
been
negatively
impacted
by
a
number
of
factors
ranging
from
material
costs,
permission
delays,
high
interest
rates
to
political
uncertainty
in
key
markets.
In
this
article,
we
analysed
the
“solar
paradox”.
Best
December
ETF
Performers
There
are
about
83
percentage
points
between
the
best-
and
worst-performing
ETPs
in
December
(our
list
excludes
inverse
and
leveraged
funds),
with
returns
for
the
month
ranging
from
52.6%
to
-21.2%.
December’s
ranking
largely
mirrors
that
of
the
entire
year,
with
blockchain
and
digital
asset
products
leading
the
way.
The
December
Laggards
Meanwhile,
the
worst-performing
ETF
in
December
was
WisdomTree
Sugar
ETC
(SUGA),
exposed
to
the
fluctuations
of
sugar,
with
a
monthly
loss
of
21%.
This
is
likely
due
to
profit-taking
–
sugar
had
risen
about
40%
in
the
first
11
months
of
the
year.
We
then
find
trackers
exposed
to
other
soft
commodities
such
as
soybean,
as
well
as
natural
gas,
and
to
the
Turkish
stock
exchange.
Turkish
stocks
suffered
in
December
as
a
central
bank
intervention
in
the
currency
market
failed
to
stem
the
lira’s
decline
amid
surging
inflation
in
the
country.
The
currency
has
come
under
pressure
after
the
central
bank
cut
its
benchmark
repo
rate
by
a
percentage
point
to
14%,
despite
inflation
accelerating
to
over
21%.
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