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Weekly ETF Monitor for week ending 16 June 2017

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Jun 16, 2017

The S&P/ASX 200 rebounded last week, posting a 1.7% gain despite declining commodity prices. Healthcare, real estate and financials were the leading sectors. The three top performing ETFs for the week were all domestic property funds (SLF, VAP and MVA). Globally, the S&P 500 posted a modest gain despite  further declines in the technology sector. The Fed Reserve raised rates for the second time this year. The Australian dollar ended the week 1.3% higher, pushing back above US 76c for the first time since early April. Commodity markets were mostly weaker last week with precious metals declining in the wake of higher US interest rates. WTI crude fell to a new year-to-date low on higher OPEC output in May. The Australian ETF market saw inflows of A$79m and outflows of A$28m from domestically domiciled ETFs. The largest inflows were into broad-based domestic equity funds (QOZ and STW) and the largest outflows were from BetaShares Australian High Interest Cash ETF (AAA).

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Weekly ETF Monitor for week ending 09 June 2017

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Jun 09, 2017

Global equity markets were mostly in the red last week, with former FBI director James Comey's testimony and the British election weighing on the market. The S&P/ASX 200 declined by 1.9%, its worst weekly performance of the year. The S&P 500 ended the week down 0.3% and the Nasdaq 100 dropped 2.4%, following wide-spread selling in the technology sector on Friday. Bearish domestic equity ETFs (BBOZ and BEAR) were amongst the top performing funds for the week, whilst domestic property ETFs (SLF, MVA and VAP) were amongst the poorest performers. The Australian dollar ended the week 1.1% higher, pushing back above US 75c. Pound sterling dropped over 1% following the British election outcome. WTI crude dropped 3.8% following news of higher than expected US inventories. Iron ore fell by 5.9% on slowing Chinese growth. ETFS Physical Palladium ETF (ETPMPD) was the top performing fund for the second week running, returning 5.7% for the week and 27.2% year-to-date. Demand for the metal, mainly from the auto industry, has spiked recently pushing prices to 16 year highs. The Australian ETF market saw inflows of A$85m and outflows of A$5m from domestically domiciled ETFs.

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Silver lining investment theme

Jun 07, 2017

Silver lining investment theme Trade idea – ETFS Physical Silver ETF (ETPMAG) Gold vs silver ratio – indicates that silver is undervalued o Has averaged 62.63 since 1980 (as of 24 May 2017) o Currently widened to 73.49 (as of 24 May 2017) o 1x standard deviation above the long term average (as of 22 May 2017) Positive economics - a combination of higher inflation, a weakening US dollar (in first half of 2017) and improving manufacturing growth is likely to see silver prices trading higher. Is silver trading below fair value? Historically the ratio difference between gold and silver has been an interesting investment indicator of market direction. The gold vs silver ratio graph below identifies a potential trading theme. The graph indicates that when the ratio falls below the historic average line it could show gold as being below fair value relative to silver. On the reverse, when the ratio trades above the historical ratio average, like it is now, silver could be trading below fair value relative to gold. Positive price movements The Global Manufacturing Purchasing Managers Index (“PMI”) is sitting at a current high of 54.4, previously unseen since March 2011. In our view, the high PMI may indicate a potential increase in manufacturing activity and therefore a further potential positive move for the silver price in 2017. However, it should be noted that if we saw a global slowdown in manufacturing or a hawkish view from the US FED, this could potentially have a negative impact on the current price of silver and impact the gold vs silver ratio trading theme. Increasing demand Silver has a wide and growing range of uses globally, which could help further stimulate demand and create a positive move in the silver price; examples of silver’s growing uses include printed circuit board manufacturing, healthcare and the production of solar panels. ETF Securities research team give silver a 2017 fair value level of US$21/oz – for further information visit the ETF Securities Research Blog.

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Weekly ETF Monitor for week ending 02 June 2017

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Jun 02, 2017

The S&P/ASX 200 rose 0.6% last week following a bounce on Friday on strong economic data out of the US and a firming expectation of a Fed rate rise this month. The S&P 500 ended the week up 1.0%, while the Nikkei 225 rose 2.5%. Three Japanese equity ETFs (IJP, UBJ and HJPN) were amongst the top performers for the week. The Australian dollar ended the week flat after recovering some lost ground on Friday. The euro and Japanese yen both had strong weeks, gaining against the US dollar. The Chinese renminbi jumped 0.7%, posting its fourth consecutive weekly gain against the US dollar. WTI crude dropped 4.3%, while gold gained 0.8%. Palladium gained 7.3% and posted a new 3-year high on increasing demand from the auto sector. ETFS Physical Palladium ETF (ETPMPD) was the top performing fund for the week, returning 7.4%. The Australian ETF market saw inflows of A$185m and outflows of A$4m from domestically domiciled ETFs. The largest inflows were into SPRD S&P/ASX 200 Fund (STW) and BetaShares Australian High Interest Cash ETF (AAA).

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Weekly ETF Monitor for week ending 26 May 2017

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May 26, 2017

The S&P/ASX 200 ended the week up 0.4%, led higher by the energy and industrials sectors. Offshore, the S&P 500 gained 1.4% and the EURO STOXX 50 declined 0.2%. In Asia, the Nikkei 225 gained 0.5%, while the FTSE China 50 added 2.8% and Korea's KOSPI 200 jumped 3.0%. Chinese and Korean equity funds (IKO, CETF and IZZ) were amongst the top performers for the week. Currency markets were relatively unchanged last week, with the Australian dollar ending marginally lower at US74.5c. The pound sterling declined after polls narrowed in the lead up to next month's UK election. WTI crude advanced early in the week before pulling back on Friday after OPEC announced lower than anticipated production cuts. Gold and silver gained 1.0% and 3.1% respectively. ETFS Physical Silver (ETPMAG) was the top performing commodity fund for the week. Iron Ore declined 7.6%. The Australian ETF market saw inflows of A$55m and outflows of A$1m from domestically domiciled ETFs. The largest inflows were into domestic equity funds (QOZ and MVW).

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Weekly ETF Monitor for week ending 19 May 2017

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May 19, 2017

Global equities retreated last week as US political turmoil dominated headlines. The S&P/ASX 200 ended the week down 1.9%, the S&P 500 dropped 0.4% and the EURO STOXX 50 declined 1.4%. The domestic financial sector was hit hardest, with financial sectors ETFs (QFN, OZF and MVB) all amongst the poorest performers for the week. In Asia, the Nikkei 225 declined 1.5% on a strengthening yen, while the Shanghai Composite posted its first weekly gain in six weeks. The Australian dollar gained 1% last week on general US dollar weakness. The euro gained 2.5% and the yen gained 1.9%. WTI crude gained 5.2% on anticipation of OPEC production cuts. Gold and silver gained 1.7% and 2.9% respectively as investors looked to protect against increased equity volatility. Iron ore advanced 2.1%. Crude oil, silver and gold ETFs (OOO, ETPMAG and QAU) were amongst the top performers for the week. The Australian ETF market saw inflows of A$153m and outflows of A$4m from domestically domiciled ETFs. The largest inflows were into SPDR S&P/ASX 200 Fund (STW).

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