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Weekly ETF Monitor for week ending 20 November 2020

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Nov 24, 2020

This week's highlights Australian bank ETFs were the top performers across the market last week, with MVB, OZF an QFN all returning in excess of 6% for the week. ETFS Battery Tech & Lithium ETF (ACDC) continued its strong run in recent months, while global energy fund FUEL was also amongst the week’s top performers. Global gold mining funds GDX and MNRS were the week’s poorest performers, followed by healthcare funds IXJ, HLTH and DRUG. Precious metals mostly declined last week with gold (GOLD), silver (ETPMAG) and palladium (ETPMPD) all down for the week. Platinum, however, rallied strongly, with ETPMPT amongst the top performing funds for the week – up 5.6%. Oil fund OOO also posted a strong week, returning 4.9%. Total reported flows into domestically domiciled ETFs were $642m, while outflows totalled $71m. Domestic equity funds STW and IOZ saw the biggest inflows for the week, followed by S&P 500 fund IVV and a range of other, mostly equity, funds. Domestic cash fund AAA saw the week’s largest outflows. STW was the most traded fund for the week, followed by AAA and IOZ. Property fund SLF saw above average volumes. ETFS Battery Tech & Lithium ETF (ACDC) offers investors exposure to global companies developing electro-chemical storage technology and mining companies producing battery-grade lithium. ACDC has returned 48.4% year-to-date and 51.1% over the past 12-months, significantly outperforming broader equity markets on the back of growing investment in the renewable energy segment.

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Weekly ETF Monitor for week ending 13 November 2020

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Nov 17, 2020

This week's highlights Equity markets mostly rallied last week on positive vaccine news. Sector rotation continued as cyclical sectors outperformed. Global energy companies fund FUEL and global banks fund BNKS were the week’s top performers, followed by global value fund VVLU and high yield/low volatility U.S. equity fund ZYUS. Global property funds DJRE and REIT were also amongst the week’s top performers. Gold mining funds MNRS and GDX were the week’s poorest performers, while tech-heavy funds ESPO and FANG also ended the week lower. Precious metals declined last week with silver (ETPMAG) and palladium (ETPMPD) leading the way lower. Oil fund OOO returned 7.9% for the week. Total reported flows into domestically domiciled ETFs were $455m, while outflows totalled $296m. Nasdaq-100 fund NDQ saw the biggest inflows for the week, along with other technology heavy funds ASIA and FANG. Bond fund IAF and global international equity funds IEM, IHVV and IVV also saw strong flows. Domestic equity fund IOZ and cash fund AAA saw the week’s largest outflows. BBOZ was the most traded fund for the week, followed by VAS and AAA. WVOL saw above average volumes. ETFS S&P 500 High Yield Low Volatility ETF (ZYUS) offers investors exposure to a selection of 50 stocks from the S&P 500 chosen on the basis of dividend yield and volatility. ZYUS’s portfolio has a weighted average dividend yield of 5.2% compared to 1.7% for the S&P 500 and is weighted towards defensive sectors such as utilities and real estate.

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Weekly ETF Monitor for week ending 6 November 2020

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Nov 10, 2020

This week's highlights Equities rallied last week despite the inconclusive initial results of the US election, with the S&P 500 returning 7.5% for the week. Leveraged funds LNAS and GGUS were the week’s top performers, while currency hedged funds HNDQ, MNRS, HETH and DRUG all outperformed. Australian property funds MVA and SLF were also amongst the top performers benefiting from the RBA’s rate cut decision. The Australian dollar strengthened significantly, with currency funds (YANK, USD, ZUSD, POU and EEU) all amongst the week’s poorest performers. Gold remained steady, while palladium (ETPMPD) and silver (ETPMAG) both gained more than 5%. Total reported flows into domestically domiciled ETFs were $320m, while outflows totalled $79m. Cash fund AAA saw the biggest inflows for the week followed by NDQ and GOLD. World multi-factor fund WDMF saw the week’s largest outflows. BBOZ was again the most traded fund for the week, followed by BBUS and IOZ. NDQ saw above average volumes. ETFS Ultra Long Nasdaq 100 Hedge Fund (LNAS) offers investors leveraged exposure to the Nasdaq-100 Index. LNAS gains its exposure to the market via a portfolio of Nasdaq-100 futures contracts and is actively managed to maintain a market exposure of between 200% and 275%. LNAS is also currency hedged to reduce the impact of movements in the AUD/USD exchange rate.

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Weekly ETF Monitor for week ending 30 October 2020

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Nov 03, 2020

This week's highlights Equity markets moved lower last week with short funds BBUS, SNAS, BBOZ and BEAR topping the weekly performance table. Asian technology and technology-related funds ASIA and CNEW were amongst the few equity funds in the green. European focused funds ESTX, HEUR, IEU and VEQ were all amongst the week’s poorest performers as COVID lockdowns accelerated across the continent. The U.S. dollar strengthened on haven buying, with YANK, USD and ZUSD all amongst the top performers for the week. Gold remained steady, while other precious metals declined. Oil fund OOO ended the week down 10.3%. Total reported flows into domestically domiciled ETFs were $925m, while outflows totalled $83m. Domestic equity fund VAS saw the biggest inflows for the week followed by fixed income funds VBND and VAF. Domestic equity fund IOZ and bearish fund BBOZ saw the week’s largest outflows. BBOZ was the most traded fund for the week, followed by AAA. Global equity fund QUAL saw above average volumes. ETFS Ultra Short Nasdaq 100 Hedge Fund (SNAS) offers investors leveraged inverse exposure to the Nasdaq-100 Index. SNAS gains its exposure to the market via a portfolio of Nasdaq-100 futures contracts and is actively managed to maintain a market exposure of between -200% and -275%. SNAS is also currency hedged to reduce the impact of movements in the AUD/USD exchange rate.

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Valuing gold in a portfolio

Nov 03, 2020

The value of gold is more than its spot price but also how it works in a portfolio. As an asset with multiple drivers determining its price, gold can seem mysterious, but the data suggests its role in client portfolios is clear. Gold’s investment value Gold can’t be valued using traditional metrics related to coupon or dividend value. While some institutions have created their own models, it can be more valuable to consider the interaction of gold with other assets in a portfolio. Gold is included in portfolios for a myriad of reasons – diversification, growth, as a hedge against inflation, and for a volatility safe-haven. These reasons are backed by the data. The below chart shows the correlation between gold and other asset classes which demonstrates why it is able to perform differently and even offer positive performance in volatile periods. Allocating to gold in a portfolio Gold allocations traditionally spread from 2-10% of a portfolio depending on risk tolerance and market conditions. For many investors, taking a flexible approach may be the answer, dialling up or down allocations based on individual client portfolio needs and market activity. For example, some financial advice firms, like Stockspot, have used a slightly higher allocation of 12% in recent times. Using an ETF like ETFS Physical Gold (ASX Code: GOLD) may be a suitable option for many portfolios as it offers a low-cost, liquid and easy to use exposure without the need for physical storage. Contact us to find out more about GOLD and using it in your portfolio. Client Services Phone +61 2 8311 3488 Email: infoAU@etfsecurities.com.au

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The value of gold in your portfolio

Nov 03, 2020

Gold can seem like a mysterious asset, but data suggests it has a clear value in a portfolio. Setting the price Gold prices are set by the London Bullion Market Association (LBMA) which also incorporates specific global standards for gold sales and receipt. According to the World Gold Council, there are four broad sets of drivers to indicate gold’s performance1 which vary in their influence at different points in time. Economic expansion: gold is used in jewellery, technology and long-term savings. These are areas that experience a boost in times of economic growth. These are also periods where inflation and interest rates may rise, and gold is traditionally viewed as a hedge against inflation. Risk and uncertainty: gold has traditionally acted as a store of value in uncertain times and its demand can go up in market downturns, for example, demand increased in the early months of the global COVID-19 pandemic. Opportunity costs: the costs and returns of other assets, such as bonds and currencies, can increase or decrease investor interest in gold. Momentum: price trends, the use of riskier investments and general investment flows can direct demand for and therefore the price of gold. The investment value of gold Gold is included in portfolios for a myriad of reasons – diversification, growth, as a hedge against inflation, and for a volatility safe-haven. These reasons are backed by the data. Gold has a low (and at times, negative) correlation to other assets as shown in the following chart. This means it performs differently to other asset classes thus assisting with diversification and in volatile periods in other asset classes. Gold has also offered positive performance over the longer term against other asset classes as shown in the following chart: Allocating to gold in a portfolio Gold allocations traditionally spread from 2-10% of a portfolio depending on risk tolerance and market conditions. For many investors, taking a flexible approach may be the answer, dialling up or down allocations based on individual client portfolio needs and market activity. For example, some financial advice firms, like Stockspot, have used a slightly higher allocation of 12% in recent times. Using an ETF like ETFS Physical Gold (ASX Code: GOLD) may be a suitable option for many portfolios as it offers a low-cost, liquid and easy to use exposure without the need for physical storage. Contact us to find out more about GOLD and using gold in your portfolio. Client Services Phone +61 2 8311 3488 Email: infoAU@etfsecurities.com.au 1 https://www.gold.org/goldhub/research/relevance-of-gold-as-a-strategic-asset-2020-individual

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