Exchange-traded funds (ETF) mimicking equity indexes of emerging economies delivered the best returns in the first half of 2009 of all Australian Securities Exchange (ASX)-listed ETFs, while those tracking so-called defensive assets slipped.
The iShares MSCI BRIC ETF, which tracks stocks in Brazil, Russia, India and China, was the top performer, surging 25.77 per cent in the six months to 30 June.
Other iShares ETFs including FTSE/Xinhua China 25 and MSCI Taiwan rallied 16.64 per cent and 16.17 per cent, respectively.
"Emerging markets were hit the hardest when the overall market sold off on the back of the financial turmoil in 2008 and the start of this year," Macquarie Private Wealth private client adviser Shannon Briggs said.
"But we have seen a recovery in the US and UK markets so the emerging markets have followed suit very strongly after being oversold."
The ETF Securities Physical Gold, which tracks the price of the precious metal, slipped 8.46 per cent in the first half.
The iShares S&P Consumer Staples and S&P Global Healthcare ETFs lost 12.67 percent and 15.43 per cent, respectively.
"There was a flight to safety originally, but once the market became more confident, everyone started to pursue cyclical and growth stocks, leaving the defensive sectors to underperform," Briggs said.
Among ETFs tracking broad developed stock markets, State Street Global Advisors SPDR S&P/ASX 200 advanced 6.98 per cent in first half, while the iShares S&P 500 and S&P Europe 350 lost 11.02 per cent and 8.48 per cent, respectively.
ETFs have gained more recognition in the financial planning industry in 2009.
Matrix Planning Solutions recently said it added a broad range of ETFs to its approved product list.
Earlier this year, the FPA accredited ETF training modules as part of financial planners' continuing professional development programme. The modules were developed by iShares Australia. Vanguard Investments Australia unveiled its initial suite of ETFs in May.
The market capitalisation of ASX-listed ETFs stood at $1.859 billion at the end of June 2009, 14.3 per cent higher than in June 2008, according to ASX data.
