Individual Investors

How robotics and AI are transforming supply chains

Jul 06, 2020

The COVID-19 crisis has shed a light on how fragile supply chains can be, with essentials from toilet paper to milk vanishing from shelves. The solution could be robotics, automation and AI according to a new paper from ROBO Global, the index provider behind ETFS ROBO Global Robotics and Automation ETF (ASX code: ROBO). Read the article The current pandemic has demonstrated how heavily existing supply chains rely on a human labour force. While many companies, such as Coles, already had plans to incorporate automation, it is likely that the current situation will accelerate this trend. There are five key areas where robotics, automation and AI are likely to transform supply chains. Automated warehouse solutions High flying robots, such as from Verity, can assist with access and inspection of inventory at warehouses allowing for taller warehouses and increasing safety for the human workforce. Warehouse picking and packing Picking and packing is highly labour intensive. Using robots has been a game-changer for companies like Amazon and Walmart. Online grocers Online orders for groceries substantially increased during COVID-19 lockdowns and the convenience may see the interest continue. Companies like Ocado, with sophisticated warehouse technology and robotics, are selling their technology to other partners like Coles. Micro-fulfilment Think curbside pick-up of orders, but facilitated by automated technology. Prepared food delivery Restaurants have struggled to keep up with food delivery demand during lockdown periods so ‘ghost kitchens’ designed just for food prepared solely for delivery may assist. Restaurants have struggled to keep up with food delivery demand during lockdown periods so ‘ghost kitchens’ designed just for food prepared solely for delivery may assist. For more information on investing in robotics, automation and AI, contact us using the details below. Sales Trading Phone +61 2 8311 3488 Email: infoAU@etfsecurities.com.au Phone +61 2 8311 3483 Email: capitalmarkets@etfsecurities.com.au

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Three reasons to invest in the vaccines of tomorrow

Jun 24, 2020

Technology is not just transforming the way we work and live, it is also saving lives and changing how we treat diseases. The biotechnology industry may be appealing from a social and moral perspective, but it is also trending for future growth. Download the full article What is biotechnology? Biotechnology is a sub-industry of the healthcare sector and specifically refers to technologies that use biological processes, capturing companies that focus on research, development, manufacturing and/or marketing of products based on biological and genetic information. The different types of biotechnology include biological drugs, vaccines, immunotherapy, gene therapy, orphan drugs and genetic engineering. This industry has hit the headlines during the COVID-19 pandemic, with companies like Moderna and Gilead part of the race to find effective vaccines and treatments. Why consider investing in global biotechnology? A growth industry backed by demand from an increasing population (and the trend of an aging population) a. Biotechnology is predicted to be valued at more than US$729bn by 2025, compared to US$295bn today[1]. b. The industry will benefit from increased spending in healthcare. The US, for example, is expected to average 5.4% annual increases in national health spending through to 2028[2]. Diversification in your portfolio a. Biotechnology in the US is valued at approximately 14.2x the Australian industry[3]. b. Biotechnology can be lucrative but is also high risk, so spreading internationally across a number of companies can assist in managing these risks. The chance to invest in something ‘bigger’, incorporating social themes into your portfolio a. The opportunity to be a backer for more efficient future health treatments, a social good with the potential to generate growth. How to invest in biotechnology? You could consider direct shares or managed options. Direct shares may be a riskier option due to the high failure rates of drug testing and long periods of development. Managed options such as ETFS S&P Biotech ETF (ASX code: CURE) may offer broader exposure across a number of companies. For more information about investing in biotechnology, click here or contact us using the details below. Investor Relations Institutional Trades Phone +61 2 8311 3488 Email: infoAU@etfsecurities.com.au Phone +61 2 8311 3483 Email: capitalmarkets@etfsecurities.com.au [1] https://www.gminsights.com/industry-analysis/biotechnology-market [2] https://www.healthleadersmedia.com/finance/national-health-spending-growth-projected-54-annually-through-2028 [3] https://www.ibisworld.com/au/industry/biotechnology/1901/

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Powering the future: investing in battery technology

Jun 10, 2020

Renewable energy is a growing sector that is set to overtake fossil fuel energy in the future. Investors interested in this area should consider battery technology and storage, an area that is essential for the growth of renewables. A growing market: why battery technology? The value chain for battery technology ranges from mining companies, mining for metals like lithium, to manufacturers of battery storage and storage technology providers. All are potential beneficiaries of the anticipated growth in this industry. Lithium ion batteries have transformed the battery industry and accounts for 85% of commissioned, utility scale battery storage worldwide[1]. By 2022, utility scale battery energy storage capacity is expected to more than double, while the market for battery technology is anticipated to reach $90bn by 2025, growing more than 12%[2][3]. This growth is due to growing demand and increasing affordability of renewable energy like wind and solar power, along with the transition towards electric cars. Renewable energy in particular is an intermittent source and thus, dependent on reliable storage systems to ensure ongoing power. The Telsa-built Hornsdale Power Reserve in South Australia is a large-scale example of battery storage in play. How to invest in battery technology? Investors can access battery technology exposure in a range of ways. Focusing on value chain component companies such as mining companies or battery manufacturers. Considering broader established companies with some exposure to battery technology. Managed options, either active or via ETFs like ETFS Battery Tech & Lithium ETF (ASX code: ACDC). For more information about ETFS Battery Tech & Lithium ETF (ASX code: ACDC) or investing in battery technology, please contact us on 02 8311 3488 or infoAU@etfsecurities.com.au

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Investing to meet your financial goals

May 13, 2020

Whether your goal is to build a house deposit, pay for education or create a retirement income, taking a measured approach to your investments can help. Most investors typically need to be able to preserve a certain level of capital, while also investing for long term growth or income. An enhanced core-satellite approach to building your investment portfolio can help you target your goals and manage market movements. Download the complete paper or read a summary below. What is enhanced core-satellite investing? Enhanced core-satellite investing is a two-pronged approach to portfolio construction, where the core is made up of passive exposures to major asset classes (mainly equities and fixed income) and the satellite investments are more opportunistic and designed to seek specific growth outcomes, sometimes at higher levels of risk. Satellite investments could be targeted ETFs, actively managed funds or investments in individual companies or real estate. Generally, the core might be 65-85% of the portfolio, depending on the investor’s goals, investment horizon and risk tolerance, while satellites tend to represent 15-35%[1]. Assisting you with your goals This approach can assist investors in meeting their goals because it allows the main component to focus on long term growth and stability and use the satellite component to take on investing opportunities which may carry greater opportunity of returns alongside greater risk of loss to help meet specific goals. Interested in finding out how this approach has worked during the COVID-19 pandemic? Read more How this might look is as follows. An investor might use an ETF like ETFS S&P/ASX 300 High Yield Plus ETF (ASX code: ZYAU) to represent the Australian equities exposure in the core of their portfolio. They might then choose to incorporate a growth theme like robotics and artificial intelligence in their satellite portion by using an ETF like ETFS ROBO Global Robotics and Automation ETF (ASX code: ROBO). Using ETFs in the investment portfolio can be beneficial due to characteristics like liquidity (allowing investors to be flexible based on needs or market conditions), low costs along with flexibility and variety. With a wide range available on the ASX, investors are more likely to find an ETF to meet specific goals or match particular views. For more information on enhanced core-satellite portfolio construction or to find out more about using our range of ETFs in your portfolio, speak to ETF Securities.

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Three investment ideas for COVID-19

May 13, 2020

Investing has become a game of chicken in the eyes of some investors. Has COVID-19 become a buying opportunity? Have we seen the bottom, or is the worst yet to come? It’s hard to make any solid predictions in this unfamiliar territory – investment markets have experienced a health crisis rather than being undone by poor fundamentals, such as in the global financial crisis. Those investors looking for ideas could consider the following. Download the complete paper or read the summary below 1. The essentials Some sectors are largely able to continue normal operations, even in crisis situations. Humans still need basic supplies and services to live, meaning that consumer staples continue to see demand, while infrastructure such as energy suppliers or telecommunications continue to need to operate. In the current situation, telecommunications have been particularly essential with much of the population needing to work from home. Investors could look at an ETF like ETFS Global Core Infrastructure ETF (ASX code: CORE) to access global infrastructure. 2. Defensive assets Uncertain times can make for volatile markets. Some investors may seek to include defensive assets which may be less correlated to equity market performance, such as precious metals like gold or silver. Gold in particular has been used as a safe haven asset in the past for its low and at times negative correlation to other asset classes. Investors can access precious metals through ETFs like ETFS Physical Gold (ASX code: GOLD) or ETFS Physical Silver (ASX code: ETPMAG). 3. Long-term megatrends Those investors looking beyond the current activity could consider megatrends, some of which have accelerated during the pandemic. Trends such as ecommerce or online entertainment, falling under the megatrend for virtual connectivity and digitisation, have experienced spikes as citizens in lockdown have become attuned to their availability and convenience. Investors seeking companies which focus on this theme can consider an ETF like ETFS FANG+ ETF (ASX code: FANG) which includes companies like Amazon and Netflix. Biotechnology may be a longer-term trend but it is also particularly topical at the moment in the hunt for vaccines and a cure for COVID-19. The ETFS S&P Biotech ETF (ASX code: CURE) accesses this trend and offers exposure to some of the key players currently working against the virus, including Gilead, Regeneron and Moderna.

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Four ways to manage market volatility

Apr 02, 2020

From the current COVID-19 situation to the future, markets will always face periods of uncertainty and volatility. A measured approach to investment management can assist with supporting your investment portfolio in these periods. In this paper, we discuss four common approaches. Download now Market volatility refers to the magnitude of upward and downward movements in asset prices over a period of time. A company whose stock price moves up and down by 1% daily is considered less volatile than one with 5% daily moves. Investors tend to think of volatility in terms of downward market movements, as we are currently seeing, but it can equally relate to the pace of rising markets. Approaches to managing volatility 1. Diversification Different assets, regions and sectors may react differently to market events and perform better in certain market conditions. For example, travel and tourism are struggling in the current situation while supermarkets are thriving. For this reason, spreading your money across a range of investments can help balance your exposure to volatility experienced in different areas. 2. Incorporating more stable, less cyclical investments Some investments may not offer high growth but tend to be consistent across a range of markets. For example, essential services infrastructure is needed regardless of market conditions so can continue to offer stable performance in times of volatility. 3. Alternative investments Some investors seek out investments which specifically perform differently to share and bond markets. The aim of this strategy is to help neutralise any negative outcomes experienced in share and bond investments. One asset used in this way is gold which typically has a low or negative correlation with other asset classes. 4. Strategic tilts For certain investors, incorporating short-term investments during market volatility might be part of their strategy. This might mean temporarily adding defensive investments to help protect their portfolio or it might mean seeking out high growth (riskier) investments if they believe there may be opportunities from an eventual market recovery. ETFs can be an effective tool for investors in periods of market volatility. They can assist by offering broad exposure and instant diversification in a liquid and cost-effective manner. The wide range of specialised ETFs available on today’s stock exchanges also offer investors choice and flexibility in how to adapt to changing market conditions. Beyond these measures, it’s worthwhile stepping back to consider the what, why and how of your investments rather than simply following the crowds. It can also help to speak to a financial professional about your strategy and options. For more information on the solutions ETF Securities offers, please contact us on: Sales Trading Phone +61 2 8311 3488 Email: sales@etfsecurities.com.au Phone +61 2 8311 3483 Email: primarymarkets@etfsecurities.com.au

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