Resources

How to use thematic investing in your portfolio

Nov 02, 2020

Thematic investing exposes your portfolio to some of the major socioeconomic, environmental and technological themes of our times in a tailored way. So what does this actually mean and how can you use thematic investing in your portfolio? Download the whitepaper, here. What is thematic investing? Thematic portfolios look at long-term macro trends, such as robotics and automation, and then use various screens and information sources to identify the companies or assets which support this trend through infrastructure or services. It can span several sectors or even asset classes, for example, a thematic investment in technology is likely to include companies within the technology sector as well as those in other sectors which access this trend, such as Amazon or Netflix. Investment themes should be: Universal rather than specific to just one company or region1. Sustainable over longer periods, in some cases 20 years or more. Based on known patterns and pressures2. Some examples of well documented themes include virtual connectivity, ecommerce, biotechnology, the growth of the middle-class in Asia and climate change. How to use thematic investing in your portfolio Thematic investments are versatile and can be used in a range of ways, such as: To complement the equities component in the core of a portfolio. As a tactical tilt in the satellite portion of a portfolio towards trends or for growth. As a diversification tool to broaden from typical assets in a portfolio core. Whichever way investors choose to incorporate thematic investing within their portfolios, they should still consider the suitability for themselves and their portfolio, along with the risks involved - including risks that may be specific to a particular theme. Investors can consider a variety of options to access themes in their portfolios, such as: Direct shares in companies associated with a theme. Actively managed funds. Exchange traded funds (ETFs). Investors should be aware of different fees, minimum investments, brokerage, tax implications and W-8 BEN forms for some investments. There are different risks and benefits to using any of these approaches. Thematic investments offer investors the chance to be an active participant in the major forces driving human progress. They can also be the opportunity for investors to incorporate their passions within their investments, or even to have the potential of holding the ‘next big thing’ in a more manageable format. The increasing availability of tailored thematic investments in the market means they are more accessible than ever for investors to consider their suitability and fit for their needs, goals and portfolios. For more information on using thematic investments, please speak to ETF Securities. Client Services Phone +61 2 8311 3488 Email: infoAU@etfsecurities.com.au 1 https://www.stockbasket.com/investmans-playbook/thematic-investment-ideas 2 https://publications.csiro.au/rpr/ws/v1/download?pid=csiro:EP126135&dsid=DS2

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Thematic investing for your clients’ portfolios

Nov 02, 2020

Investing in thematics is a newer concept but can expose your clients to some of the major socioeconomic, environmental and technological themes of our times. For many financial advisers, the question arises of how exactly to use such investments and allocate to them within a portfolio. What is thematic investing? Thematic portfolios follow a top-down approach to investing. They look at long-term macro trends, such as robotics and automation, and then use various screens and information sources to identify the companies or assets which support this trend through infrastructure or services. Themes should be: Universal rather than specific to just one company or region1. Sustainable over longer periods, in some cases 20 years or more. Based on known patterns and pressures2. Some examples of well documented themes include virtual connectivity, ecommerce, biotechnology, the growth of the middle-class in Asia and climate change. Access to thematic investments Typically, advisers might consider three different options for their clients. Direct shares in companies associated with a theme. Actively managed funds. Exchange traded funds (ETFs). Each carries different risks and benefits, along with varying fees, minimum investments, brokerage, tax implications and W-8 BEN forms in some instances. While still carrying investment risks such as market or liquidity risks, ETFs tend to be the lowest cost and most accessible option for investors given the potential for exposure to many companies and they usually cost less than actively managed options. How to allocate to thematic investments Thematic investments are versatile and can be used in a range of ways, such as: To complement the equities component in the core of a portfolio. As a tactical tilt in the satellite portion of a portfolio towards trends or for growth. As a diversification tool to broaden from typical assets in a portfolio core. The size of the allocation may vary depending on how the investor chooses to use it, ranging from 5-10% per investment depending on factors such as existing portfolio composition, risk tolerance, needs and goals. Thematic investments can help offer clients the chance to be an active participant in the major forces driving human progress. They can also be the opportunity for clients to incorporate their passions within their investments, or even to have the potential of holding the ‘next big thing’ in a more manageable format. The increasing availability of tailored thematic investments in the market means they are more accessible than ever for financial advisers to consider their suitability and fit for their clients’ needs, goals and portfolios. For more information on using thematic investments, please speak to ETF Securities. Client Services Phone +61 2 8311 3488 Email: infoAU@etfsecurities.com.au 1 https://www.stockbasket.com/investmans-playbook/thematic-investment-ideas 2 https://publications.csiro.au/rpr/ws/v1/download?pid=csiro:EP126135&dsid=DS2

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Weekly ETF Monitor for week ending 23 October 2020

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Oct 27, 2020

This week's highlights Equity markets traded mainly lower last week, with some exceptions. Global banks fund BNKS was the top performing equity ETF, followed by South Korean fund IKO and agriculture fund QAG. China new economy fund CNEW, cybersecurity fund HACK and gold miners funds MNRS and GDX were the week’s biggest decliners. ETFS Ultra Short Nasdaq 100 Hedge Fund (SNAS) returned 2.4% for the week as the Nasdaq-100 declined. Gold traded slightly lower last week, though other precious metals outperformed. ETFS Physical Platinum (ETPMPT) was the top performing fund for the week, returning 5.1%. Palladium fund ETPMPD was also amongst the top performers. Crude oil ETF OOO dropped 3.1% for the week. Total reported flows into domestically domiciled ETFs were $301m, while outflows totalled $32m. Domestic cash fund AAA saw the biggest inflows for the week followed by FAIR and QUAL. Leveraged domestic equity fund GEAR saw the week’s largest outflows. VAS was the most traded fund for the week, followed by AAA. Fixed income fund VBND saw above average volumes. ETFS Physical Platinum (ETPMPT) offers investors exposure to fully-allocated physical platinum and provides exposure to the supply and demand dynamics for the metal in areas such as the automotive, technology and medical industries.

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Weekly ETF Monitor for week ending 16 October 2020

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Oct 20, 2020

This week's highlights Equity markets were mixed last week with dispersion across regions and sectors. China funds CETF, IZZ and CNEW were the top performing equity ETFs followed by tech-focused funds ATEC, HACK, NDQ and FANG. Domestic bank fund MVB also has a strong week. International energy companies (FUEL), global banks (BNKS), Japanese equities (HJPN) and property funds (REIT and MVA) were all amongst the poorest performers. Leveraged US dollar fund YANK was the week’s overall top performing ETF on the back of a drop in AUD from US72.4c to US70.8c. Gold and silver both gained ground, while palladium fund ETPMPD dropped 2.9% for the week. Total reported flows into domestically domiciled ETFs were $425m, while outflows totalled just $15m. Domestic equity fund IOZ saw the biggest inflows for the week followed by BBOZ. Domestic equity yield fund ZYAU saw the week’s largest outflows. IOZ was the most traded fund for the week, followed by BBOZ and AAA. Fixed income fund VAF saw above average volumes. ETFS FANG+ ETF (FANG) offers investors exposure to a concentrated portfolio of the world’s top innovation leaders across today’s technology and tech-enabled companies. FANG holds a portfolio of ten stock including Apple, Amazon, Google and Netflix. The fund returned 3.1% last week and is up 56.9% since its launch on 27th February 2020.

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Weekly ETF Monitor for week ending 9 October 2020

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Oct 13, 2020

This week's highlights Equity markets moved higher last week across the board with geared funds GEAR, LNAS and GGUS topping the weekly performance table. Domestic financial sector funds (MVB, QFN and OZF) rallied strongly, all returning more than 7.5% for the week. Biotech fund CURE also posted a strong week. Short funds BBOZ, SNAS, BBUS and BEAR were the only equity funds to post significant negative returns for the week. Precious metals mainly held ground last week. Palladium fund ETPMPD added 5.0%. Oil advanced, with OOO adding 9.6% for the week. Long US dollar funds YANK, ZUSD and USD were all amongst the week’s poorest performers. Total reported flows into domestically domiciled ETFs were $464m, while outflows totalled $124m. Domestic equity fund IOZ saw the biggest inflows for the week followed by BBOZ. Resource sector fund QRE and multi-factor fund WDMF saw the week’s largest outflows. BBOZ was the most traded fund for the week, followed by IOZ and VAS. IHVV saw above average volumes. ETFS S&P Biotech ETF (CURE) offers investors broad exposure to the US biotechnology industry. CURE currently holds 140 stocks and is equally weighted at each quarterly rebalance. CURE returned 8.2% last week and is up 22.0% year-to-date.

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Weekly ETF Monitor for week ending 2 October 2020

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Oct 07, 2020

This week's highlights The domestic equity market moved lower last week with bearish fund BBOZ topping the weekly performance table. Financial and resources sector funds (MVB, QRE and OZR), along with Australian large cap funds (ILC and VLC) were all amongst the poorest performers. International real estate (REIT), agriculture (QAG) and US small caps (IJR) were the week’s top performing unleveraged equity funds. Precious metals all advanced, with platinum (ETPMPT), silver (ETPMAG) and palladium (ETPMPD) all amongst the week’s top performing funds. The Australian dollar also posted a strong week, with AUDS returning 4.7%. Oil declined, with OOO dropping 8.0%. Total reported flows into domestically domiciled ETFs were $264m, while outflows totalled $66m. Domestic property fund MVA saw the biggest inflows for the week followed by STW. Cash fund AAA saw the week’s largest outflows. BBOZ was the most traded fund for the week, followed by VAS and GEAR. VGB saw above average volumes. ETFS Physical Platinum (EPTMPT) offers investors exposure to physical platinum bullion vaulted with JP Morgan in London. ETPMPT returned 3.8% for the week, though it remains the only precious metal to be trading lower year-to-date.

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