The abrdn Future Supply Chains UCITS ETF and abrdn Future Raw Materials UCITS ETF have marked their one-year track record with both strategies achieving strong absolute and relative returns in their respective Morningstar categories while reinforcing their role as forward-looking, structural allocations.
These active ETFs are designed to benefit from two themes driving profound changes in the global economy: the re-shaping of global supply chains and the transformation in demand for raw materials.
The strong performance of abrdn Future Supply Chains and abrdn Future Raw Materials since launch reflects the powerful tailwinds behind these themes. It’s important to recognise that markets don’t move in a straight line, and it would be unrealistic to expect this level of stellar performance to continue uninterrupted.
What gives Aberdeen confidence, however, is the strength and durability of the underlying drivers.The last 12 months have been characterised by a significant increase in geopolitical risk, disruption to international trade and continued demand for strategic raw materials.
Jamie Mills O’Brien, co-manager of the abrdn Future Supply Chains UCITS ETF, said:
“The active ETF’s returns over the past year have been supported by rising policy support, increased defence and industrial spending, and an acceleration in the pursuit of supply chain resilience across sectors and geographies. What initially emerged as a post-pandemic adjustment is now evolving into a structural realignment of how and where goods are produced, the technology used to make them and the energy that powers them all.
“Recent developments have only reinforced this trend. Geopolitics, energy security and trade fragmentation are now structural features of the global economy, prompting companies and governments to diversify production and invest in domestic capabilities. We believe that investment across reshoring, infrastructure and energy systems is likely to continue at pace as supply chains become increasingly driven by security, resilience and sustainability considerations.”
David Clancy, Quantitative Index Solutions Director at Aberdeen, said:
“Demand for materials linked to electrification, renewables and digital infrastructure have driven the performance of the Future Raw Materials ETF since launch. At the same time, supply has remained constrained as long lead times for new mining projects, combined with increasing permitting complexity, have limited the ability for supply to respond. This has created a supportive pricing environment.
“From a portfolio perspective, copper and aluminium companies have been key contributors. Copper benefitted from supply disruptions and sustained demand, while aluminium saw strong price moves, particularly in March, driven by supply shortages linked to Middle East tensions. Looking ahead, the combination of structurally rising demand and constrained supply remains central. In a more geopolitically fragmented world, access to critical materials is becoming increasingly strategic, a dynamic that continues to support the long-term outlook for the companies we invest in.”
The Future Raw Materials ETF provides exposure to global companies supplying critical minerals essential for the energy transition, industrial growth and technological innovation, offering a focused way to access this structural theme. The strategy focuses on five key materials: copper, lithium, rare earths, aluminium and nickel, with smaller allocations to uranium and silver.
The Future Supply Chains ETF invests in global companies benefiting from the reshaping of global supply chains, including reshoring, localisation, and increased investment linked to national security and energy resilience.
The abrdn Future Supply Chains and Future Raw Materials ETFs sit within Aberdeen’s growing ‘Future’ range of thematic funds which includes the abrdn Future Real Estate UCITS ETF. These strategies blend quantitative investment research capabilities with the expertise of Aberdeen’s global equity team in a hybrid approach to offer exposure to megatrends that impact global markets in a low-cost, liquid wrapper.
Emily Smart, Chief Product Officer, Aberdeen Investments, said:
“One year since the launch of the Future Supply Chains and Future Raw Materials ETFs, it is evident that many of the market dynamics that underpin the strategies have not only played out but accelerated. However, while these active ETFs are labelled thematic, they do not represent an attempt to tap into a short-term theme. Rather, they offer exposure to investment themes that we believe will have a significant impact on markets over the long-term.
“The performance of these two ETFs highlights the growing importance of these structural themes and the strength of our approach. For Supply Chains, a focus on key enablers such as defence and energy resilience has been pivotal; for Raw Materials, the strategic importance of critical minerals and diversification of their supply chains has come clearly into focus. Both strategies, which combine our expertise in both quantitative analysis and active management, offer genuine diversification relative to global markets, with recent geopolitical tensions further reinforcing their long-term relevance and opportunity set.”
