Selftrade's ETF Select 100: Which Funds Topped The Performance Charts In December 2017?

According to data from Selftrade and ITI Group, the Source Energy S&P US Select Sector UCITS ETF saw the biggest rise of the month, climbing 8.25%, while the iShares S&P 500 Energy Sector UCITS ETF rose 5.97%.

Brent Crude, which is currently trading at $69.1 a barrel (as at 17 January), has risen significantly from the 2017-lows of $45.1 a barrel in June, after the Organisation of the Petroleum Exporting Countries (OPEC) and non-OPEC members agreed to extend their cuts of 1.8 million barrels a day until the end of 2018 following a meeting in Vienna in November 2017.

It rose above $70 a barrel on 11 January in mid-afternoon trading after the UAE oil minister and OPEC president Suhail al-Mazrouei said the alliance between the respective producers could continue beyond the December 2018 deadline.

Simon Glover, Chairman, ITI Group, said: "Two energy-related ETFs were in the top five for the month as a result of crude oil continuing to appreciate.

"OPEC has limited production in an attempt to clear overhanging crude oil stocks and at the end of November agreed to extend these cuts into 2018. They are having a considerable impact on the market and nearby crude oil availability is tightening.

 "Crude oil appreciated over 4% during December and ended the month some 42% higher from the low of the year recorded in June 2017." 

Also in the top five best performers were financial ETFs, which have been boosted by the tightening of monetary policy from the Federal Reserve; the market has priced in three rate hikes in 2018.

The iShares S&P 500 Financials Sector UCITS ETF was the best performing financials ETF increasing 6.84% for the month, while the Source Financials S&P US Select Sector UCITS ETF surged 6.79%.

US markets could face pressure from 'Fed storm' factor

Gold and bond ETFs were negatively impacted as the Fed raised rates by 25 basis points to 1.5% in December.

The Source Physical Gold P-ETC and iShares' Physical Gold ETC fell 1.27% and 1.23% respectively, while the iShares $ Treasury Bond 20+yr UCITS ETF was the worst performer of the month falling 2.14%, as of 26 December.

Glover said: "Bonds and gold had edged lower for the prior month as US interest rates nudged higher, but a late year-end rally after the top and worst performer tables had been compiled, resulted in both asset classes closing out the month in positive territory."

Commenting on ETF flows on Selftrade's platform, Mark Taylor, chief customer officer for Selftrade from Equiniti, said: "It has been a quieter month for ETF flows with the USA and Europe continuing to see inward flows.

"However, the noticeable change in sentiment this month has been investors looking to purchase ETFs that short the UK market.

"While there have been moments of increased volatility in the market there are clearly some investors looking to take advantage of any potential corrections in the FTSE as it hits record highs."

The total assets represented by all ETFs in the ETF Select 100 rose 1.5% in December to £179.5bn.