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Weekly ETF Monitor for week ending 1 September 2017

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Dec 01, 2017

The S&P/ASX 200 declined by 0.3% last week, dragged down by the financials and real estate sectors. ETFs in those sectors (MVB, QFN and OZF) were amongst the poorest performers for the week. Offshore, the S&P 500 added 1.4%, the Nikkei 225 gained 1.2% and the EURO STOXX 50 also posted a modest gain. The Australian dollar continued to range trade, ending the week 0.5% higher at US 79.75c. It has now traded almost exclusively within a US78-80c range for the past 7 weeks. The euro lost 0.5% against the US dollar, only its second weekly decline since June, while the yen also lost 0.8%. Precious metals made strong gains last week, with gold up 2.6% and silver up 3.9%. Gold and gold mining ETFs (GDX, MNRS and QAU) were amongst the top performers for the week. WTI Crude declined for a fifth consecutive week. The Australian ETF market saw inflows of A$65m and outflows of A$21m from domestically domiciled ETFs last week. Inflows were into broad-based equity funds (IOZ and SFY) and cash/fixed-income products (PLUS, QPON and FLOT). Outflows were primarily from BetaShares Australian High Interest Cash ETF (AAA).

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Weekly ETF Monitor for week ending 24 November 2017

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Nov 24, 2017

Equity markets rebounded last week with the S&P/ASX 200 up 0.4% and the S&P 500 gaining 0.9% and hitting a new record high. Europe and Asia also posted strong gains, with the EURO STOXX 50 up 1.0% and Hong Kong's Hang Seng up 2.3%. ETFS ROBO Global Robotics and Automation ETF (ROBO) was the top performing equity ETF last week, returning 2.6% for the week and 9.0% for the month as investor interest in the robotics, automation and AI theme continues to grow both in Australia and offshore. Australian resource sector ETFs also performed strongly with QRE, OZR and MVR all returning over 2%. The Australian dollar gained 0.7% last week, rising back above US 76c, while the euro gained 1.2% and the Japanese yen gained 0.5% against the US dollar. Precious metals mostly declined as risk-on sentiment returned; gold dropped 0.3% and silver fell 1.5%. WTI crude added 4.2%, ending the week above US$58/bbl for the first time in over 2 years. Iron Ore posted its third consecutive weekly gain, adding 8.5%. The Australian ETF market saw inflows of A$106m and outflows of A$107m from domestically domiciled ETFs last week. Inflows were into a range of domestic equity ETFs (QRE, QOZ and EX20), QPON and ROBO. ROBO has seen cumulative inflows of over A$26m since inception in mid-September.

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Weekly ETF Monitor for week ending 17 November 2017

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Nov 17, 2017

S&P/ASX 200 posted its worst weekly performance since June, declining 1.2% and falling back below 6,000 as risk assets sold off globally early last week, before recovering. The S&P 500 rebounded on tax reform progress and a strong CPI reading, ending the week down 0.1%. The EURO STOXX 50 and Nikkei 225 both declined by 1.3%. US small cap stocks performed strongly. iShares Core S&P SmallCap 600 ETF (IRJ) was the top performing ETF, returning 3% for the week. Non-Japan Asia also performed well with IKO and UBP amongst the top performing funds. The Australian dollar declined 1.3% to 0.7564, while the euro gained 1.1% against the US dollar and the Japanese yen gained 1.3%. BetaShares Euro ETF (EEU) was amongst the top performing ETFs for the week, returning 2.7%. Precious metals advanced last week, with gold up 1.4% and silver up 2.5%. WTI crude retreated modestly ahead of this month's OPEC meeting. The Australian ETF market saw inflows of A$134m and outflows of just A$2m from domestically domiciled ETFs last week. Inflows were into a range of equity and fixed income funds including STW, IOZ, PLUS and QPON.

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Europe Playing Catch Up

Oct 30, 2017

Europe Playing Catch Up ETFS Trade idea – ETFS EURO STOXX 50® ETF (ESTX) The European Central Bank’s (ECB) proactive approach is helping aid Europe’s economic recovery Lending growth is on the up The ECB wants a weaker euro which will support many of the multi-nationals in the EURO STOXX 50, who generate a majority of their revenue offshore ETFS EURO STOXX 50 ETF (ESTX) provides low cost access to European stocks without any UK exposure. This ETF was rated Recommended by Lonsec Whilst we focus on what Trump will tweet next, what new high the Dow will hit, or how long the Australian market can continue moving sideways, Europe has quietly been going about its business, continuing its recovery phase. This recovery has been aided by the ECB’s proactive approach and a stabilising geo-political environment. What should investors be looking at in Europe? What are the ECB doing? Last week on Thursday the ECB met market expectations for tapering its bond purchase program. Globally markets responded positively. For the day at close of markets on Thursday 26th October: o EURO STOXX 50 Index was up 1.3% o DAX was up 1.4% o Positive news from the ECB had a spill-over effect on the S&P 500 which was up 0.2% Show me the money Analysing Eurozone M3 data for September, lending growth is extending: o Lending to corporates rose to 2.5% y/y o Mortgage lending rose to 2.4% y/y o Consumer credit growth steady at 6.7% M1 (good indicator of transactions demand for money) in September rose to 9.7% y/y from 9.5% y/y in August Recent European reporting season Whilst the Australian reporting season was somewhat uneventful, the recent European season showed that the region is recovering strongly: Is Europe over or undervalued? The EURO STOXX 50 is still cheap when looking at valuations against other broad indexes Europe earnings also show that it has much greater catch-up potential The ECB wants a weaker euro The ECB’s concern about a rising euro will see it continue to adopt a dovish stance, as seen in last week’s policy announcement The ETFS Research team believe that any spikes higher in the euro are temporary and that the market has largely priced in tapering of the ECB’s bond purchasing program A weaker euro will support many of the multi-nationals in the EURO STOXX 50 that generate a majority of their revenue offshore Below chart shows a breakdown of the geographic revenue exposure of the EURO STOXX 50 and the S&P 500 Given the continued revival of Europe, the ETFS EURO STOXX 50 ETF (ESTX) is well positioned for investors for the following reasons: no inclusion of UK companies means fallout from Brexit negotiations is reduced the proportion of revenue generated offshore is close to 50% meaning a weaker euro could be a positive scenario for many of the constituent companies ESTX is the lowest cost Europe-focused ETF on the ASX with an MER of 0.35% p.a ESTX is domiciled in Australia so there are no W8-BEN tax forms for investors to complete and US Estate Tax is not applicable Recommended by Lonsec

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Weekly ETF Monitor for week ending 27 October 2017

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Oct 27, 2017

The S&P/ASX 200 ended last week flat after giving up earlier gains following the High Court's ruling on eligibility of MPs. The S&P 500 advanced 0.2%, with strong advances in the technology sector. The EURO STOXX 50 added 1.3% as the ECB announced an extension of its bond-buying programme, while in Japan the Nikkei 225 gained 2.6% following Abe's conclusive election victory. Japan-focused ETFs (IJP and UBJ) were amongst the top performers for the week returning over 4%. The Australian dollar dropped to its lowest levels since July, declining 1.8% to below US 77c. The euro dropped 1.5% on lower rate expectations. WTI crude gained 4.7% on concerns of OPEC supply cuts. Precious metals declined for the week in-line with US dollar strength, though gold ended the week strongly in response to political tensions in Spain. The Australian ETF market saw inflows of A$75m and outflows of A$126m from domestically domiciled ETFs last week. The largest inflows were into cash and fixed income funds (AAA, QPON and PLUS), while the majority of outflows were from SPDR S&P/ASX 200 Fund (STW).

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Weekly ETF Monitor for week ending 20 October 2017

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Oct 20, 2017

The S&P/ASX 200 gained 1.6% last week, trading above 5,900 for the first time since May. The S&P 500 added 0.9%, while the Nikkei 225 gained 1.4% ahead of Shinzo Abe's convincing election victory. ETFS Morningstar Global Technology ETF (TECH) was the top performing unleveraged ETF for the week, returning 2.5%. VanEck Vectors S&P/ASX MidCap ETF (MVE) was the top performing unleveraged domestic equity fund, returning 2.1%. The US dollar gained against most major currencies last week. The Australian dollar declined 0.9% to end the week at US 78.17c. The euro dropped 0.3% and the Japanese yen lost 1.5%. Commodities pulled back last week with gold down 1.8% and silver down 2.2%. Palladium declined 1.6%, but ETFS Physical Palladium (ETPMPD) continues to be the best performing fund on both a year-to-date and 12-month basis. The Australian ETF market saw inflows of A$72m and outflows of A$6m from domestically domiciled ETFs last week. The largest inflows were into a range of cash and fixed income funds (AAA, IAF, PLUS, BILL and QPON).

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