Jan 27, 2021
This week's highlights Technology and Asia focused ETFs dominated the list of top performers in a strong week for equity funds across the board. ETFS Ultra Long Nasdaq 100 Hedge Fund (LNAS) returned 10.2%, while ETFS FANG+ ETF (FANG), ASIA, IZZ and ATEC were all amongst the top performers for the week. Bearish funds (SNAS, BBUS and BBOZ) were the biggest decliners for the week, while global sector funds such as financials (BNKS), energy (FUEL) and infrastructure (MICH and VBLD) also posted negative weeks. Precious metals had a quiet week with gold (GOLD) adding 0.5%. Palladium (ETPMPD), which dropped by 3.1%, was the biggest mover for the week. Total reported flows into domestically domiciled ETFs were $242m, while outflows totalled just $2m. Domestic sustainability fund FAIR saw the biggest inflows for the week, followed by a range of global equity funds including QUAL, ASIA and ACDC. VAS was the most traded fund for the week, followed by STW and IOZ. ASIA saw above average volumes. ETFS Ultra Long Nasdaq 100 Hedge Fund (LNAS) was the week’s top performing fund, returning 10.2%. LNAS uses a portfolio of long Nasdaq 100 futures to gain a leveraged exposure to the Nasdaq-100 Index, which is actively managed at between 200% and 275% of the fund’s net assets. LNAS is also currency hedged to reduce the impact of any moves in the AUD/USD exchange rate.
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.
Jan 25, 2021
Investing may look a bit different in 2021 as the year starts with cautious optimism and global vaccine rollouts. The investment winners in the year of the pandemic were technology companies, but what lies ahead this year for your clients? Portfolios will be guided by five trends this year: economic drivers such as recovery from COVID-19 and low global interest rates, along with trends like the movement to value, thematic investing and short & leveraged investing. Download the full whitepaper Global economic recovery from COVID-19 We now have approved vaccines being rolled out in the US and UK, along with planned pipelines for the rest of the globe, but investors shouldn’t assume an instant return to normal. It takes time to vaccinate a population and many countries are still battling severe outbreaks. Governments globally have announced generous stimulus packages to revive business activity. The European Union approved a coronavirus stimulus package to raise 750 billion euros1 after being hard-hit by the pandemic, particularly Italy and Spain in the later stages but countries like the Czech Republic struggling in later waves2. Investors can access European recovery through an ETF like ETFS EURO STOXX 50® ETF (ASX Code: ESTX). Beyond this, many countries are considering or resuming broadscale projects to further economic growth, with infrastructure one option for this. For example, India, initially subject to the world’s toughest lockdowns to manage COVID-19, has forged ahead with its existing US$1.4 trillion infrastructure program3. Investors can access activity in India through an ETF like ETFS Reliance India Nifty 50 ETF (ASX Code: NDIA). Low interest rates globally Interest rates declined further in 2020 to support global economies dealing with the pandemic. It is likely cash rates will remain low through most of 2021 to support recovery with the potential of increases late in the year. Low interest rates are typically supportive of business development and growth activities however have also placed pressure on yield-focused investors. Many have been forced to consider asset classes outside of fixed income to support their needs and this trend is likely to continue across the year. Some will take a ‘riskier’ approach to their yield investments and look for dividend-bearing assets, including equities. Investments in “safe-haven” commodities including gold and silver have a low opportunity cost and offer stability so are likely to continue to be popular across the year. Precious metals also typically perform well in periods of low interest rates, with investors using these, particularly gold, rather than cash as a store of value and to protect against inflation4. Investors can access gold on the ASX through the ETFS Physical Gold (ASX Code: GOLD). Movement to value investments Investors tend to move away from growth investments like technology in periods of economic recovery or growth. As news of vaccines hit markets in late 2020, investors started to shift towards value investments such as banks or industrials. This is likely to continue across 2021. The Australian sharemarket is strongly skewed towards financials and resources, which include companies typically falling into value investments so investors may look towards broad Australian exposures, slightly tailored cross-market exposures like ETFS S&P/ASX 300 High Yield Plus ETF (ASX Code: ZYAU) or sector exposures to refocus on value investments. Thematic investing Investors have been increasingly interested in the themes of the future in recent years and being able to invest according to their views and values. This trend is likely to continue in 2021. Dynamics in the coming year, such as vaccine rollout or renewed focus on climate change are likely to see biotechnology and climate change related investments appeal in 2021. Investors interested in healthcare may take a thematic or sub-sector approach such as healthcare biotechnology through funds such as the ETFS S&P Biotech ETF (ASX Code: CURE). Investors focused on climate change may consider the growing range of ETFs capturing sustainability, or alternatively consider battery technology which is key to 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 & leveraged investments Across the volatility of 2020, many self-directed sophisticated investors took a short-term approach to trading and embraced short & leveraged funds. The popularity in the previous year suggests we may see the range available in Australia continue to expand to support interest in investing based on high conviction views. Find out more about the short & leveraged products offered by ETF Securities here. 1. EU leaders finally approve coronavirus stimulus package (cnbc.com) 2. How COVID-19 upended life in Europe throughout 2020 | Euronews 3. Source: India 2030: exploring the Future; National Infrastructure Pipeline 4. Gold investment demand remains well supported in 2021 – report - MINING.COM
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%.