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Weekly ETF Monitor for week ending 2 March 2018

Global stocks retreated last week as president Trump announced that the U.S. will impose tariffs on steel and aluminium imports. The S&P 500 dipped 2.0%, the S&P/ASX 200 was down 1.2% for the week, while the Nikkei 225 fell 3.3%. The EURO STOXX 50 fell 3.4% in the lead up to the Italian election on Sunday. Bearish exposures (BBUS and BBOZ) were the top performing equity funds for the week, while hedged exposure to Japan (HJPN) was amongst the poorest returning funds.

U.S. yields continued to pick up last week as rate-hike expectations firmed. The Japanese yen strengthened against the dollar, while the pound sterling declined 1.2% as Brexit uncertainty returned to focus. The Australian dollar weakened by 1.2% against the U.S. dollar, 1.0% against the euro and 2.2% against the yen. BetaShares Strong US Dollar Hedge Fund (YANK) was amongst the top performing funds for the week, returning 2.3%.

WTI crude oil dropped 3.6% to end the week at US$62.25/bbl. Precious metals retreated, with gold down 0.5% and palladium dropping 5.2% as Trump's tariff plans hit expectations of auto demand.

The Australian ETF market saw inflows of $52m into and outflows of $22m from domestically domiciled funds last week. The largest inflows were into iShares S&P/ASX 200 ETF (IOZ), while outflows were from a range of domestic and international equity funds.