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Weekly ETF Monitor for week ending 19 June 2020

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Jun 23, 2020

This week's highlights Equity markets rallied last week with high beta technology and small cap funds posting the top performances. ETFS S&P Biotech ETF (CURE) was the week’s top performer, returning 8.3%. Technology focused funds ATEC, ASIA, TECH and FANG were all amongst the best performers. Domestic and international small cap funds KSM, MVS and IMPQ also performed strongly. Real estate (DJRE) and resources funds (QRE and OZR) were amongst the poorest performers. Oil fund OOO continued to benefit from the rebound in the global crude market, returning 7.7%. Gold held firm at close to US$1,750/oz, while other precious metals mainly declined. Total reported flows into domestically domiciled ETFs were $313m, while outflows totalled just $78m. GOLD saw the biggest inflows for the week, followed by bearish fund BBOZ. Multifactor fund WDMF saw the largest outflows. BBOZ was the most traded fund for the week, followed by domestic equity fund IOZ. OOO again saw above average volumes. ETFS S&P Biotech ETF (CURE) invests in over 130 US-listed biotechnology firms. Renewed focus on the sector since the advent of the COVID-19 pandemic has seen the fund return 14.5% since the end of February and strongly outperform the broader US equity market.

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Global biotechnology in your clients’ portfolios

Jun 23, 2020

Biotechnology has hit the headlines during the COVID-19 pandemic as companies race for vaccines and treatments, but its growth prospects extend beyond this period. Australian investors may be well familiar with this industry, given the dominance of CSL, but may be missing exposure to the international market, in particular, the US, the global centre of biotechnology. Download the full article here What is biotechnology? Biotechnology is a sub-industry of the healthcare sector and specifically refers to technologies that use biological processes, capturing companies that focus on research, development, manufacturing and/or marketing of products based on biological and genetic information. The different types of biotechnology include biological drugs, vaccines, immunotherapy, gene therapy, orphan drugs and genetic engineering. The US is typically viewed as the centre of global biotechnology due to the size of its market and the world-renowned US Food & Drug Association (FDA) approval process. The US industry is valued at US$113.bn, approximately 14.2x the size of the Australian biotechnology industry[1]. Why use global biotechnology in your clients’ portfolios? A growth investment a. Biotechnology is predicted to be valued at more than US$729bn by 2025, compared to US$295bn today[2]. b. The industry will benefit from increased spending in healthcare. The US, for example, is expected to average 5.4% annual increases in national health spending through to 2028[3]. Diversification away from concentrated Australian industry a. Biotechnology can be a high-risk industry, as well as lucrative. Average development costs for developing a drug are estimated at more than US$2.1bn and processes can take 10 years or more for approvals – assuming the drugs are successful[4][5]. Biotechnology performance has also benefited from highly active mergers and acquisitions (M&A) activity, expected to continue in the future. a. M&A for biotechnology was valued at US$23bn in 2019 with predictions of increased activity for 2020[6]. How to invest in biotechnology? You can consider direct shares or managed options for your clients’ portfolios. Direct shares may be a riskier option due to the high failure rates of drug testing and long periods of development. Managed options such as ETFS S&P Biotech ETF (ASX code: CURE) may offer broader exposure across a number of companies. For more information about investing in biotechnology, click here or contact us using the details below. Investor Relations Institutional Trades Phone +61 2 8311 3488 Email: infoAU@etfsecurities.com.au Phone +61 2 8311 3483 Email: capitalmarkets@etfsecurities.com.au [1] https://www.ibisworld.com/au/industry/biotechnology/1901/ [2] https://www.gminsights.com/industry-analysis/biotechnology-market [3] https://www.healthleadersmedia.com/finance/national-health-spending-growth-projected-54-annually-through-2028 [4] Deloitte Centre for Health Solutions, Unlocking R&D Productivity, 2018. [5] https://www.phrma.org/en/Advocacy/Research-Development/Clinical-Trials [6] https://assets.ey.com/content/dam/ey-sites/ey-com/en_gl/topics/life-sciences/life-sciences-pdfs/ey-firepower-report-2020-how-will-deals-done-now-deliver-what-the-health-ecosystem-needs-next-v2.pdf

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Weekly ETF Monitor for week ending 12 June 2020

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Jun 16, 2020

This week's highlights Equity markets mostly declined last week, with second-wave fears and cautious Fed comments halting the rally. Bearish funds (BBUS, BBOZ and BEAR) were amongst the top performers, while technology-related companies in China (CNEW) and the US (FANG) outperformed. Global energy companies (FUEL), banks (BNKS) and US small-and mid-cap companies (IJR and IJH) were amongst the poorest performers. Precious metals all rallied strongly last week. GOLD returned 5.1% for the week, while the diversified ETFS Physical Precious Metals Basket (ETPMPM) returned 3.8%. Gold miner (GDX) was also amongst the top performers. Oil declined, with OOO returning -7.8%. Total flows into domestically domiciled ETFs were $285m, while outflows totalled just $14m. Domestic cash fund AAA saw the biggest inflows for the week, followed by IOZ. Consumer staples fund IXI saw the largest outflows. Bearish fund BBOZ was the most traded fund for the week, followed by domestic equity fund VAS. GOLD and OOO saw above average volumes. ETFS FANG+ ETF (FANG), which invests in 10 of the world’s largest technology and technology-enabled companies, returned 2.4% for the week. FANG+ stocks, including Apple, Amazon, Netflix and Google have shown resilience in turbulent markets this year. Year-to-date the NYSE FANG+ Index, which FANG aims to track, has outperformed the broader S&P 500 by more than 30%.

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Weekly ETF Monitor for week ending 5 June 2020

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Jun 10, 2020

This week's highlights Bullish sentiment continued last week as most major equity indexes ended the week up. Global Banks surged and oil continued to rally on the back of extended output cuts. Among the top performers for the week were BetaShares Global Banks ETF (Hedged) (BNKS) up 14% and BetaShares Crude Oil Index ETF - Ccy Hedged (OOO) up 10.1%. Geared US Dollar currency ETFs, miners and precious metals were amongst the worst performers. BetaShares Strong US Dollar Hedge Fund (YANK) was down -10.7% and VanEck Vectors Gold Miners ETF (GDX) was down -9.6%. Flows for the week were mostly seen across Cash and Core exposure ETFs. iShares Core Cash ETF (BILL) had A$43.1m of inflows and iShares CORE Composite Bond ETF (IAF) had A$21.3m of inflows. Outflows were highest across iShares S&P 500 AUD Hedged (IHVV) and iShares Global Consumer Staples ETF (IXI) Chinese Equity, Technology and precious metals remain the best performers YTD.

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Clean energy in your clients’ portfolios

Jun 10, 2020

Battery technology investments could be the answer for clients with an interest in the environment and a desire to incorporate this within their portfolios. Renewable energy and electric cars are set to take over fossil fuels as a source of energy in coming decades, but to do so, battery technology and storage will be critical. Renewables and battery technology Renewable energy, namely solar and wind power, are intermittent power sources. To rely on these is to require reliable energy storage in the form of batteries. Likewise, electric cars are completely dependent on battery storage to operate. The South Australian Hornsdale Power Reserve is the largest example in the world of battery storage for renewable energy, making Australia one of the leaders (surprisingly, given our coal industry) in transformation. Wind and solar energy are forecast to supply around 48% of world electricity needs by 2050, with battery technology, gas peakers (turbines or engines that burn natural gas) and dynamic demand anticipated to drive market penetration of solar and wind by more than 80% according to BloombergNEF[1] . To accommodate this growth, utility scale battery energy storage capacity is expected to more than double by 2022, while the market for battery technology is anticipated to reach $90bn by 2025, growing more than 12%[2][3] . How to invest in battery technology? The value chain for battery technology ranges from mining companies, mining for metals like lithium, to manufacturers of battery storage and storage technology providers. All are potential beneficiaries of the anticipated growth in this industry. There are a range of ways to access battery technology in your clients’ portfolios. Direct shares in value chain component companies with the bulk of their revenue related to this area, such as mining companies like Pilbara Minerals or battery manufacturers. Direct shares in broader companies which still include exposure to battery technology, such as Panasonic. Managed funds, either active options or ETFs such as ETFS Battery Tech & Lithium ETF (ASX code: ACDC) which offer exposure across the industry. For more information about ETFS Battery Tech & Lithium ETF (ASX code: ACDC) or investing in battery technology for your clients, please contact us. Sales Trading Phone +61 2 8311 3488 Email: sales@etfsecurities.com.au Phone +61 2 8311 3483 Email: primarymarkets@etfsecurities.com.au This document is communicated by ETFS Management (AUS) Limited (Australian Financial Services Licence Number 466778) (“ETFS”). This document may not be reproduced, distributed or published [1] https://about.bnef.com/new-energy-outlook/ [2] www.forbes.com/sites/mergermarket/2020/02/18/the-future-of-battery-energy-storage-is-upon-us/#d5b173d4a185/ [3] www.mordorintelligence.com/industry-reports/global-battery-market-industry/

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Powering the future: investing in battery technology

Jun 10, 2020

Renewable energy is a growing sector that is set to overtake fossil fuel energy in the future. Investors interested in this area should consider battery technology and storage, an area that is essential for the growth of renewables. A growing market: why battery technology? The value chain for battery technology ranges from mining companies, mining for metals like lithium, to manufacturers of battery storage and storage technology providers. All are potential beneficiaries of the anticipated growth in this industry. Lithium ion batteries have transformed the battery industry and accounts for 85% of commissioned, utility scale battery storage worldwide[1]. By 2022, utility scale battery energy storage capacity is expected to more than double, while the market for battery technology is anticipated to reach $90bn by 2025, growing more than 12%[2][3]. This growth is due to growing demand and increasing affordability of renewable energy like wind and solar power, along with the transition towards electric cars. Renewable energy in particular is an intermittent source and thus, dependent on reliable storage systems to ensure ongoing power. The Telsa-built Hornsdale Power Reserve in South Australia is a large-scale example of battery storage in play. How to invest in battery technology? Investors can access battery technology exposure in a range of ways. Focusing on value chain component companies such as mining companies or battery manufacturers. Considering broader established companies with some exposure to battery technology. Managed options, either active or via ETFs like ETFS Battery Tech & Lithium ETF (ASX code: ACDC). For more information about ETFS Battery Tech & Lithium ETF (ASX code: ACDC) or investing in battery technology, please contact us on 02 8311 3488 or infoAU@etfsecurities.com.au

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