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Weekly ETF Monitor for week ending 26 June 2020

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Jun 30, 2020

This week's highlights Volatility returned to equity markets last week with most markets ending the week in the red. Gold miners benefited from record gold prices, with GDX and MNRS being the top performing ETFs for the week. Bearish US (BBUS) and Australian (BBOZ) funds also performed well. Asian equities had a stronger week, with India ETFs (IIND and NDIA) performing strongly, alongside ASIA and IAA. Global energy (FUEL), US and global high yield equities (ZYUS and INCM) and global banks (BNKS) were all amongst the poorest performers. Silver (ETPMAG) was the top performing commodity fund for the week, following by hedge gold (QAU). Gold continued its advance ending the week at US$1,771/oz, its highest since 2012. Total reported flows into domestically domiciled ETFs were $331m, while outflows totalled just $40m. Cash fund AAA saw the biggest inflows for the week, followed by currency hedged global equities (IHML) and GOLD. Oil fund OOO saw the largest outflows. BBOZ was the most traded fund for the week, followed by AAA. Healthcare fund IXJ saw above average volumes. ETFS Reliance India Nifty 50 ETF (NDIA), which tracks the 50 largest companies listed on India’s NSE, returned 2.3% for the week. The fund is up over 15% since bottoming in late March amid COVID-19 lockdowns.

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Three reasons to invest in the vaccines of tomorrow

Jun 24, 2020

Technology is not just transforming the way we work and live, it is also saving lives and changing how we treat diseases. The biotechnology industry may be appealing from a social and moral perspective, but it is also trending for future growth. Download the full article 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. This industry has hit the headlines during the COVID-19 pandemic, with companies like Moderna and Gilead part of the race to find effective vaccines and treatments. Why consider investing in global biotechnology? A growth industry backed by demand from an increasing population (and the trend of an aging population) a. Biotechnology is predicted to be valued at more than US$729bn by 2025, compared to US$295bn today[1]. 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[2]. Diversification in your portfolio a. Biotechnology in the US is valued at approximately 14.2x the Australian industry[3]. b. Biotechnology can be lucrative but is also high risk, so spreading internationally across a number of companies can assist in managing these risks. The chance to invest in something ‘bigger’, incorporating social themes into your portfolio a. The opportunity to be a backer for more efficient future health treatments, a social good with the potential to generate growth. How to invest in biotechnology? You could consider direct shares or managed options. 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.gminsights.com/industry-analysis/biotechnology-market [2] https://www.healthleadersmedia.com/finance/national-health-spending-growth-projected-54-annually-through-2028 [3] https://www.ibisworld.com/au/industry/biotechnology/1901/

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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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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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