Jan 19, 2021
This week's highlights Markets came off slightly last week from fresh highs. Small caps, low volatility and biotechnology all performed well over the week. iShares Core S&P SmallCap ETF (IJR) was up 2.9%, ETFS S&P 500 High Yield Low Volatility ETF (ZYUS) up 2.6% and ETFS S&P Biotech ETF (CURE) up 2.5%. The worst performers over the week were gold miners, with BetaShares Global Gold Miners ETF (Hedged) (MNRS) was down 5.4%. Net inflows for the week were A$236m. iShares S&P/ASX 200 ETF (IOZ) had the biggest inflows of A$60.2m, while ETFS Physical Gold (GOLD) had A$26.7m. The biggest outflows were seen in BetaShares Australian High Interest Cash ETF (AAA) totalling A$33.9m. The most-traded ETFs over the week were Vanguard Australian Shares Index ETF (VAS), BetaShares Australian High Interest Cash ETF (AAA) and BetaShares NASDAQ 100 (NDQ). ETFS Battery Tech & Lithium ETF (ACDC) continues to remain the best 12 month performer up 64.4%.
Jan 12, 2021
This week's highlights: As the electric vehicle revolution gains more momentum, Battery Technology and Miners soared. ETFS Battery Tech & Lithium ETF (ACDC) was up 9% and BetaShares Global Energy Companies ETF (Hedged) (FUEL) up 8.8%. Global real estate and Australian Tech had a poor week. SPDR Dow Jones Global Real Estate Fund (DJRE) was down 2.6% and BetaShares S&P/ASX Australian Technology ETF (ATEC) down 2.3% Australian domiciled products maintained strong inflows of A$268m over the week. Beta domestic equity products and Global Tech saw most of the inflows. iShares S&P/ASX 200 ETF (IOZ) had A$32.4m of inflows for the week and SPDR S&P/ASX 200 Financials ex A-REITS Fund (OZF) A$14.1m of outflows. The start of 2021 has continued a strong rebound in equity markets as investors continue to support emerging megatrends such as Battery Technology and Lithium. ETF Securities’ ETFS Battery Tech & Lithium ETF (ACDC) is up 71% over 12 months. Currently the best performing Australian listed ETF.
Dec 22, 2020
This week's highlights Precious metal silver, gold miners and oil posted strong gains last week as markets remained near all time highs. ETFS Physical Silver (ETPMAG) was the best performer over the week up 7.3%. BetaShares Global Gold Miners ETF (Hedged) (MNRS) surged 5.9% and BetaShares Crude Oil Index ETF - Ccy Hedged (OOO) was also up 5.3%. The Aussie dollar continued to strengthen and broke through US 76 cents. BetaShares Strong US Dollar Hedge Fund (YANK) was one of the worst performers down 2.9%. Australian domiciled products maintained strong inflows of A$206m over the week. Global equity products saw most of the inflows as investors steered away from cash products. VanEck Vectors MSCI World Ex-Australia Quality ETF (QUAL) had A$42m of inflows for the week and BetaShares Australian High Interest Cash ETF (AAA) had A$55m of outflows. This year has seen large inflows into ETFS Physical Gold (GOLD) as investors look for diversification and protection amongst a canvas of uncertainty. ETF Securities offers Gold, Silver, Platinum and Palladium physically backed products enabling efficient and cost effective exposure. Gold’s more volatile sibling Silver remains the best YTD performers of the precious metals up 31.5%.
Dec 15, 2020
This week's highlights ETFS S&P Biotech ETF (CURE) was the top-performing unleveraged fund last week as COVID-19 vaccine rollouts commenced. Domestic resource sector funds (OZR and QRE) were also amongst the top performers. China-related funds CNEW, CETF and IZZ were the poorest performing equity funds, while UK and European funds F100 and ESTX also saw negative weeks. Precious metals declined last week with gold (GOLD), which dropped 1.4%, being the best performer. Platinum fund ETPMPT dropped 6.1% and was the week’s overall poorest performing ETF. Pound sterling fund POU was also amongst the worst performers as Brexit concerns escalated. Total reported flows into domestically domiciled ETFs were $449m, while outflows totalled $26m. Domestic equity funds STW and IOZ saw the biggest inflows for the week, followed by currency hedged S&P 500 fund IHVV and a range of other, mostly equity, funds. Short equity funds BBOZ, BEAR and BBUS saw the bulk of the week’s outflows. VAS was the most traded fund for the week, followed by IOZ and STW. IHVV and FAIR saw above average volumes. ETFS Ultra Short Nasdaq 100 Hedge Fund (SNAS) was the week’s top performing fund, returning 3.2%. SNAS uses a portfolio of short Nasdaq-100 futures to gain an inverse exposure to the Nasdaq-100 Index, which is actively managed at between -200% and -275% of the fund’s net assets. SNAS is also currency hedged to reduce the impact of any moves in the AUD/USD exchange rate.
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 Reliance 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 Reliance 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
Dec 15, 2020
India’s star is on the rise and if you are considering an emerging markets exposure for your clients’ portfolios, it may be time to revisit India. Global challenges may just be a temporary setback for India, which is forging ahead with growth plans and many nations, including Australia, are seeking to forge closer trade partnerships. Like the broader Asian region is typically attractive to investors in emerging markets, India also benefits from the growth case of a well-documented growing middle-class and economic prospects. Recovering from the global pandemic The COVID-19 pandemic has been significant globally, not just from a health perspective but also economically. India was initially hard-hit, implementing one of the harshest and most extensive lockdowns globally1. Cases appear to have peaked in India in September and there are now signs of economic recovery as seen in indicators such as industrial output and energy consumption2. The Indian government has returned its efforts to the future growth of the nation, with key emphasis on its existing plans for infrastructure. Three key growth drivers A large and diverse nation, both in population and in region, India’s future is dominated by three key growth drivers. Infrastructure investment The Indian government has committed to US$1.4tr infrastructure investment by 20253. There is also a strong focus on climate and renewables, with the Ministry of Petroleum & Natural Gas announcing in September 2020 that it aims to operate 50% of fuel stations using solar power within five years4. India has also partnered with Japan via the India-Japan Coordination Forum for Development of Northeast for projects in India’s Northeast states5. Infrastructure can be an important tool for economic growth as it offers 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 India has historically been complicated for business operations, but government reforms have assisted in opening the country to internal and foreign business investment. The Indian government has also recently passed updated labour codes to simplify laws and compliance processes as well as incorporating a social security fund for gig and platform workers6. These reforms are anticipated to support continued ease of doing business in India. The country is also expected to benefit from accommodative monetary policy supporting business investment, along with fiscal spending programs to assist in reducing poverty. Consumption India is expected to benefit from a growing middle-class across Asia and the accompanying economic rise in consumption. It is expected to see the percentage of households in poverty drop from 15% to 5% by 20307. This creates an opportunity across industries to target a growing audience of people able to afford more than just the basics and demand better quality goods and services. While international brands are targeting this space, India’s own listed companies have physical and cultural advantages in reaching this audience. How to incorporate India in your clients’ portfolios Financial advisers could consider India from a few perspectives. Regional diversification within the core international investments of a portfolio. A tilt towards thematic investments, in this case, the trend for the growth of the middle-class across Asia, within the satellite portion of a portfolio. A growth allocation within either core or satellite portions of a portfolio. Options for investing Direct investment in Indian companies (noting that the Indian market can be difficult to access) Direct investment in companies with business operations in India which are 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 Reliance 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. For more information on investing in India or ETFS Reliance India Nifty 50 ETF (ASX code: NDIA), please speak to ETF Securities. 1 https://qz.com/india/1828915/indias-coronavirus-lockdown-harsher-than-china-italy-pakistan/ 2 https://www.businesstoday.in/current/economy-politics/rbi-rate-cut-economic-recovery-covid-lockdown-crisis/story/422035.html 3 Source: India 2030: exploring the Future; National Infrastructure Pipeline 4 https://www.ibef.org/industry/infrastructure-sector-india.aspx 5 https://www.ibef.org/industry/infrastructure-sector-india.aspx 6 https://economictimes.indiatimes.com/news/economy/policy/labour-reforms-intend-to-put-india-among-top-10-nations-in-ease-of-doing-business/articleshow/78257939.cms?from=mdr 7 http://www3.weforum.org/docs/WEF_Future_of_Consumption_Fast-Growth_Consumers_markets_India_report_2019.pdf