Jan 25, 2021
Investors may be feeling a cautious sense of optimism as we enter 2021 with global vaccine rollouts. Last year, technology companies and commodities were investment winners, so what will 2021 hold for investment markets? There are three trends we see influencing ETF investments in 2021: the movement to value, thematic investing and short & leveraged investing. Download the complete paper here Movement to value As news of vaccines hit markets in late 2020, investors started to shift their approach away from a pure growth focus and towards value investments such as banks and industrials. This trend is likely to continue in 2021 as investors anticipate a return to ‘normal’ and start to view growth stocks, particularly in the technology sector, as overpriced. The Australian sharemarket is strongly skewed towards financials and resources, including companies typically falling into value investments. Investors could consider tailored Australian exposures such as ETFS S&P/ASX 300 High Yield Plus ETF (ASX Code: ZYAU). Thematic investing with climate and biotechnology Investors are increasingly interested in tailored investments accessing the growth themes of the future, as well as being able to invest according to their views and values. ETFs targeting specific themes should continue to be prominent in the coming year and investors are becoming more aware of how to use these as part of their portfolios. While themes like virtual connectivity will continue to be popular, dynamics in the coming year should mean climate change and biotechnology will be focus points for investors. Investors considering thematic investing may wish to look at ETF Securities’ Future Present Range of ETFs. Those specifically interested in biotechnology may consider ETFS S&P Biotech ETF (ASX Code: CURE). Alternatively, investors focused on renewable energy may consider battery technology which is a key supporter for the viability of renewable energy. ETFS Battery Tech & Lithium ETF (ASX Code: ACDC) is the only Australian-listed ETF to offer exposure to the global battery technology supply chain. Short and leveraged investments Across the volatility of 2020, many self-directed sophisticated investors took a short-term approach to trading and embraced short & leveraged funds. As the world continues to recover from COVID-19 and manages the ongoing tension in global relationships, use of short and leveraged instruments is likely to continue along with continued bouts of volatility. Some sophisticated investors may anticipate changes in growth sectors like technology as the world opens again and choose short-term investments reflecting their views. For more information on the short & leveraged investments offered by ETF Securities, please click here. Moving forward in 2021 The last year was unexpected and has shifted global investment behaviour and dynamics. The Australian ETF market will continue to grow and evolve to meet the needs of investors and if the past year is any indication, investors are looking for opportunities and increasingly using ETFs for their market exposure.
Dec 15, 2020
India’s star is on the rise with many nations, including Australia, seeking to forge closer trade partnerships. Investors may wonder whether they should consider investing in India and the ways in which to include it in their portfolios. There are a range of options for investors to consider. Why consider India for your investments? Many investors are interested in emerging markets as a diversification strategy in their portfolio, with the Asian region typically attractive. The Asian region has a well-documented growth case in terms of a growing middle-class and economic prospects. Though China is typically front of mind, investors shouldn’t discount other countries, such as India, as valid options. Investors should be aware that India has continued to struggle with COVID-19, however, it is starting to show signs of recovery. India’s future is dominated by three key growth drivers: Infrastructure investment – India has committed to a US$1.4tr infrastructure investment by 20251 which can offer short term benefits such as employment, and longer term benefits in the form of useful water management, ports and roads to improve access and lifestyle for a population as well as businesses. Reform and fiscal policies – government reforms, such as the simplified GST program, have assisted in opening the country to internal and foreign business investment. There are also active efforts to support the ongoing growth of the country through fiscal spending and monetary policy. Consumption – India is expected to see the percentage of households in poverty drop from 15% to 5% by 20302 posing tremendous business opportunities as more consumers are able to afford more than the basics. Ways to invest in India It can be difficult for investors to directly access the Indian market for listed shares. From this perspective, investors could consider other options such as: Direct investment in companies with business operations in India listed in Australia or internationally. Actively or passively managed funds that focus on Asia, themes relevant to Asia or India, or specifically focus on India. ETFS-NAM India Nifty 50 ETF (ASX Code: NDIA) is the only fund in Australia that offers exposure to the Indian economy via its benchmark index, the NSE Nifty50 Index. NDIA includes exposure to the 50 largest and most liquid companies listed on the National Stock Exchange of India (NSE) and represents more than 60% of the market capitalisation of India. How to use India in a portfolio Investors can consider investing in India from a few perspectives. Regional diversification Diversification is used by many investors to manage risks specific to countries and regions. Spreading investments across a range of regions, such as India, can assist with this as well as offering exposure to different economic drivers compared to Australia or the US. From this perspective, it could be considered part of the core investments within a portfolio. A thematic investment Investors may consider an investment in India as a form of exposure to the broader trend for the growth of the middle-class across Asia. This may see the investment form part of the satellite portion of a portfolio to tilt towards thematic investments. Growth opportunity Investors looking for long-term growth opportunities could consider India within growth allocations in either the core or satellite of a portfolio given its prospects and activity. For more information on investing in India or ETFS-NAM India Nifty 50 ETF (ASX Code: NDIA), please speak to ETF Securities. 1 Source: India 2030: exploring the Future; National Infrastructure Pipeline 2 http://www3.weforum.org/docs/WEF_Future_of_Consumption_Fast-Growth_Consumers_markets_India_report_2019.pdf
Mar 03, 2020
The Indian market disappointed investors in 2019, with three key drivers behind its performance. These included the non-banking financial companies (NBFC) crisis, the Indian election and India/Pakistan conflict. Despite this, the prospects for 2020 and beyond remain positive. Read the full article here. The drivers of performance Global markets were influenced by a range of events including the US/China trade war, slowing growth and recession fears in 2019. Alongside these concerns, the Indian economy was affected by a range of domestic issues, with three drivers of particular significance. 1. NBFC crisis NBFCs offer similar services to banks but don’t hold a banking license. Some examples include equipment leasing companies or infrastructure financing. These companies have been responsible for much of the financial liquidity in India through short term borrowing from banks and mutual funds. In late 2018, an NBFC called Infrastructure Leasing & Finance Services (IL & FS) defaulted on multiple loans and covenants across India. Banks and mutual funds stopped lending to NBFCs as a result, and this caused a liquidity and confidence issue across India. The crisis continued across the early parts of 2019. 2. Government election Narendra Modi returned to power in the India election, which offers ongoing political stability. However, it is common in the lead-up to an election for incumbent governments to focus more on re-election than policy implementation and 2019 was no exception to this. 3. India/Pakistan conflict Hostilities between India and Pakistan escalated in 2019, with the volatility subsequently felt in the economy. The outlook for 2020 The Indian government and Reserve Bank of India (RBI) implemented two key measures to manage the economic challenges of 2019. These included five rate cuts and a corporate tax cut to increase confidence, investment and liquidity. These are expected to support the economy for some time to come. In addition, the Indian economy is likely to continue to benefit from factors like low inflation, ongoing political and economic reform and low stable crude oil prices. Like the broader Asian region, India should also continue to experience a growing middle-class and in turn, increasing consumption spending patterns that accompany this. You can access India through the ETFS Reliance India Nifty 50 ETF (ASX Code: NDIA). For more information on the solutions ETF Securities offers, please contact us on: Sales Trading Phone +61 2 8311 3488 Email: email@example.com Phone +61 2 8311 3483 Email: firstname.lastname@example.org