Energy and resources see November boost
After being ravaged during the March sell-off due to the COVID-19 pandemic, energy and resource funds have seen a boost during November as positive news about a COVID-19 vaccine has started a sector rotation to equities affected by the pandemic.
The COVID-19 pandemic saw a boost for technology and some consumer stocks, particularly those focused online, but sectors that were hindered by border restrictions and lockdowns were hurt.
However, as some borders had started to reopen and the potential to return to some degree of normalcy because of a functioning vaccine being developed, funds had seen a sector rotation back to those sectors that had previously struggled.
According to FE Analytics, within the Australian core strategies universe, the commodity and energy sector returned 6.39% over the last month to 30 November, 2020.
The BetaShares Crude Oil Index, which tracked the performance of the S&P GSCI Crude Oil Index with a currency hedge, returned 25.41%.
BetaShares Global Energy Companies Currency Hedged, which invested in the largest global energy companies excluding Australia, returned 25.32%.
ETF Securities (ETFS) Battery Tech and Lithium, which tracked the performance of the Solactive Battery Value-Chain Index, returned 22.17%.
The fund included Tesla as one of its largest holdings, and had holdings in energy, materials, consumer discretionary and information technology.
Janus Henderson Global Natural Resources was the only managed fund in the top five and returned 12.47%.
It held between 50-70 companies and focused on the metals and mining, energy, and agriculture sectors.
Betashares Global Agriculture Companies, tracked the performance of the Nasdaq Global ex-Australia Agriculture Companies returned 10.82%.
The index measured the overall performance of globally traded equity and equity-related securities of the largest and most liquid companies involved in agriculture and farming-related activities.
Best-performing commodities and energy funds over the last month to 30 November 2020
Over the year to 30 November, the ETFS battery ETF had returned 55.23% which was the best in the sector by a significant margin (BetaShares Global Gold Miners ETF Currency Hedged followed with a return 30.74%).
Oil and energy funds had struggled over the year, and were among the worst hit during the March sell-off.
BetaShares Crude Oil Index lost had lost 68.26% while global energy companies had lost 32.75%; both were the worst in the sector during that time period.
Performance of the same funds over the year to 30 November 2020
AUTHOR
Chris Dastoor
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