The ETF year 2020

justETF.com

Rollercoaster ride on the financial market: Corona has turned the world upside down in 2020. And a lot has happened at justETF, too. Our review of an exciting ETF year.

The ETF year 2020 What a year! Corona - the worst word of all - has dominated all our lives. The crisis did not stop at the capital market either, but it sure was exciting. 

After the extent of the pandemic became known in March 2020, prices plummeted the fastest in the history of the stock markets. While the MSCI World had gained for years in steadily rising markets, the fall was all the more drastic: Around one-third of its value was lost by an MSCI World investment (in EUR) within one month until the low point of the Corona crisis on 23rd of March. The index fell back to its lowest level since December 2016. So investors needed strong nerves.

What most people did not expect: The dip was followed by a quick recovery. Actually of all values? Not quite. The necessary structural changes towards a more digital and sustainable way of working and living set off an unprecedented euphoria in technology and megatrend ETFs, which, as in the case of the Global Clean Energy ETF from iShares 2020, led to value increases of up to 96% (as of 15/12/20) - despite the overall economic downturn.

The market capitalisation of the electric car manufacturer Tesla is now enough to be included in the S&P 500, right away in the top ten. Tech stocks now make up more than 20% of the MSCI World. The more experienced ETF investors certainly feel reminded of the tech hype of the 2000s. 

The expansionary policies of central banks in developed countries and China to keep interest rates low and money cheap have further pumped up equity markets. This has gone so far that even the ominous turmoil surrounding the presidential elections in the world's most important capital market, the USA, has so far left the stock market almost completely unaffected. China, the source country of the pandemic, has apparently regained control of the virus. This is also expressed in the indices on the Chinese domestic stock market, which have done well in comparison to the major industrialised countries and have developed exceptionally well with an increase of over 20%. 

However, there were also quite a number of stocks that were and are perceived as Corona losers. The crisis has had a considerable impact on the real economy. First and foremost, these include companies in the traditional energy sector, which have lost 35% in value so far this year (as of 15/12/20).

 

The rollercoaster ride of the Corona pandemic (energy stocks since the beginning of 2020)

The rollercoaster ride of the Corona pandemic (energy stocks since the beginning of 2020)
Source: justETF Research, performance of energy ETFs compared to the MSCI World, in EUR; as of 18/12/2020
 
Numerous other companies that are normally considered solid and crisis-proof are currently among the losers in the developments surrounding the Corona pandemic, including dividend stocks and value ETFs, as well as commodities and ETFs on commodity baskets. In the real economic crisis, commodities are simply less in demand. Futures contracts on oil even had negative prices for the first time in March - a novelty and until then unimaginable.

In 2020, around 300 new ETFs have come onto the market to date. More than 80 of them are characterised by a focus on or at least a filter for ESG criteria (environmental, social and corporate governance). In general, there is a high demand for sustainable ETFs. Despite great uncertainty caused by the pandemic, sustainable equity and bond ETFs continued to diligently collect funds, adding up to over 32 billion pounds since the beginning of the year (as of 01/12/2020).

Theme and trend ETFs were also particularly popular: almost 18 billion pounds are now invested in such ETFs in Europe. Our new investment guides make it very easy to get started with an investment.

The broadly diversified ETFs on the MSCI World or the MSCI ACWI, which are highly popular among private investors, again grew strongly in volume. More than 45 billion pounds are invested in the two index structures across Europe. Of course, this intensifies the price competition even more: the cheapest MSCI World ETF is now available for 0.12% annual fund costs, the cheapest ETF on the MSCI ACWI with almost 3,000 physically represented stocks for only 0.25 %. Broadly diversified investment has never been cheaper!

The dynamic ETF market is also constantly producing new providers, while others disappear from the market. For example, HANetf and Rize ETF are new with interesting thematic approaches. The ComStage brand, popular among private investors, has disappeared. All ComStage ETFs were incorporated into Lyxor ETFs in the course of 2020 or renamed accordingly. 

 

Lots of new content and features on the justETF website

justETF has had a new design since October. We have given our website a make-over and can now help you navigate even better through our many exciting features. Take a look at the around 100 articles in our justETF Academy.

 

The justETF family continues to grow

With over 270,000 registered users (100,000 new ones this year), there is a lot to do. That's why the justETF team is getting bigger and bigger. We are very happy about the support of our new colleagues and look forward to our common goals in 2021.

Your opinion is important to us: What do you want from justETF in 2021? Let us know by sending an email to support@justetf.com!

 
We thank all justETF users and business partners for the successful year 2020!