President-elect Trump's promise of massive infrastructure spending and trade policies that protect U.S. manufacturers―including steel producers―has been a boon for XME, which primarily holds steel companies, integrated miners and some coal stocks.
It's the same reason the VanEck Vectors Steel ETF (SLX) is the fourth-best-performing ETF of the year, with a 103.1% gain; and the Global X Copper Miners ETF (COPX) is the seventh-best-performing ETF, with a 75.1% return.
Of course, Trump isn't the only, or even biggest, reason ETFs like XME, SLX and COPX surged this year. Production cuts and rising demand in China for steel, coal and other basic materials played a big part in the recovery.
One ETF in particular that benefited from the developments in China this year was the VanEck Vectors Coal ETF (KOL). This is a fund that surged all year long as China slashed output of coal to boost prices and prop up indebted Chinese coal miners. As of Dec. 21, KOL was up 100% on the year.
Emerging Market Winners
Rounding out the top 10 list were three other ETFs, including the PowerShares S&P SmallCap Materials Portfolio (PSCM). PSCM has large holdings of small-cap stocks in the chemicals, steel and paper industries. Small-cap stocks in general took off like a rocket after the election; for example, PSCM was up close to 20% year-to-date before Nov. 8. Yesterday, it was up 58%.
Meanwhile, two single-country emerging market ETFs also made the top 10 list. The VanEck Vectors Russia Small-Cap ETF (RSXJ) spiked 103.6% this year, while the ProShares MSCI All Peru Capped ETF (EPU) gained 61.4%.
Peru, a large producer of copper, and Russia, a large producer of oil and natural gas, benefited from the recovery in their respective commodities, and the rebound in emerging markets more broadly. Russian stocks also got a boost from the U.S. election amid speculation that a Trump administration could offer sanctions relief for the country.
For a full list of this year's top ETFs, see the table below:
| Ticker | Fund | Return (%) |
| SILJ | PureFunds ISE Junior Silver (Small Cap Miners/Explorers) ETF | 121.70 |
| XME | SPDR S&P Metals & Mining ETF | 114.49 |
| RSXJ | VanEck Vectors Russia Small-Cap ETF | 104.46 |
| SLX | VanEck Vectors Steel ETF | 103.09 |
| KOL | VanEck Vectors Coal ETF | 100.03 |
| SLVP | iShares MSCI Global Silver Miners ETF | 76.15 |
| COPX | Global X Copper Miners ETF | 75.11 |
| SIL | Global X Silver Miners ETF | 67.10 |
| EPU | iShares MSCI All Peru Capped ETF | 61.41 |
| PSCM | PowerShares S&P SmallCap Materials Portfolio | 57.99 |
Table excludes leveraged/inverse products, and measures total return in the year-to-date period through Dec. 21.
Contact Sumit Roy at [email protected]