Welcome to Issue 16 of Exchange Traded Fridays for the week ending 5th November 2021. In this week's news there's more on the bitcoin/crypto ETF craze as ASIC gave the green light for what they would consider as allowable and now the baton is passed to the exchanges to provide their rules around listing. Just like in the USA with its bitcoin futures ETF, the race is on here to get to list the first Australian listed bitcoin-type ETF. Who will it be?
Also, we got to chat with the ASA (Australian Shareholders Association) about ETFs for their upcoming ETF/LIC Virtual Investor Forum (register here: https://www.australianshareholders.com.au/virtual-investment-forum and use code VIF20 for a $20 discount to all ETFtracker subscribers). Check out our video below:
What's in this newsletter?
Local ETF Articles
Global ETF Articles
ETF Videos
ETF Podcasts
Tweet of the week
Chart of the week
ETF Education
ETFtracker App Links
ETFtracker Forum
Listen or Watch
Articles - Local
AFR - Bitcoin ETF gets ASIC nod but alt-coins left out - Huge news with the folks at ASIC releasing their industry response to their consultation paper on crypto assets for ETPs (exchange traded products). Whilst they gave the green light to have bitcoin backed ETFs, there is going to be strong scrutiny on these launches so alt-coins will likely not make the cut.
Business Insider - ASIC Greenlights Bitcoin ETF - more on the announcement of ASIC greenlighting the trading of bitcoin/ethereum related ETFs and how CRYP, the blockchain ETF from BetaShares is set to launch next Thursday (and how DIGA from Cosmos Asset Management launched last week). Still early days here but if there's enough of these types of cryptocurrency or blockchain related ETFs in the Australian market, they'll probably need there own category on the official ASX/Chi-X lists (or we'll add one at least in our dataset). Interesting times ahead!
AFR - CBA to add crypto to its banking app - In a continuation of the wave of momentum behind crypto assets we see that CBA are allowing CommSec users to access cryptocurrencies. We'll see whether this pushes up interest in bitcoin ETFs or not.
Livewire Markets - 12 stocks and 6 ETFs for the next part of this cycle - In this article from Nathan Lim from Morgan Stanley, he goes through various stock as well as ETF picks and whilst we focus on ETFs, it's always interesting to see stocks too. The ETFs he flags include QUAL/QHAL, BNKS, VVLU, FUEL and IWQU (London listed). This covers a range of areas including financials, factors, resources and others in the article. Check it out!
Morningstar - Decoding an ETFs DNA - In this article, the crew at Morningstar go through what is a very important thing to understand when it comes to ETFs and that is how they are constructed. It's not often thought of by investors but is just as important to understand as market making and this article goes through what it calls the cycle of index construction as well as highlighting the traits of the best indexes.
ETF Securities - Weekly Report - w/e 29th October - Per ETF Securities: "Alternative energy sources advanced strongly last week ahead of the COP26 Summit starting this week. The best performer over the week was ETFS Hydrogen ETF (HGEN) up 10.2% and VanEck Vectors Global Clean Energy ETF (CLNE) up 8.7%. The worst performers for the week were ETFS Physical Platinum (ETPMPT) down 5.3% and iShares China Large-Cap ETF (IZZ) down 4.7%."
Articles - Global
Financial Times - BlackRock cuts fees on $14bn in ETF fees - in this article, BlackRock has reduced fees on its various iShares ETFs by up to 15 basis points which is $14bn in fees. This will hopefully drive more inflows for them across the various ETFs they reduced fees for including the iShares MSCI USA Equally Weighted ETF, the iShares GNMA Bond ETF and more.
Financial Times - Smart beta fails to match returns of bullish tech equities - out of the 3 main factors that are often used to construct 'smart beta' ETFs, value and growth/momentum have done poorly but quality, on the other hand, has done well. Other factors like min vol (e.g. low volatility) have also had issues. This article looks at why these factors have underperformed such as cyclicality, market anomalies and the changing nature of industries themselves.
Seeking Alpha - Fount Investments launches ETFs covering the metaverse and subscription economies - Given all the news around Facebook's change of name to Meta and the continued movements in the world of DeFi and Web3.0 (what is web 3.0) it is of little surprise that we'll start seeing ETF products that also cover this. In this article the Fount Metaverse (MTVR) and Subscription economy (SUBS) ETFs are discussed.
Videos
ASA - In conversation with Mark Monfort, ETFtracker - In this video we get to chat with Rachel Waterhouse, CEO of the Australian Shareholders Association about the world of ETFs and how we can use data to dig under the hood. We talk about how holdings data can give us insights into ETF portfolios and how there are other metrics that can be used to paint a picture of the ETF markets. 10mins
ausbiz - Positioning for an inflationary environment ahead - 2nd November 2021 - per the show notes "Betashares’ Adam O’Connor says there’s been a shift in positioning among ETF investors recently, noting a clear lift in demand for markets and sectors that will benefit in a reflationary environment. “It’s all about inflation,” he says. Adam says ETFS linked to banks, food and small caps have performed particularly well." 6mins
Per the show notes "Breakfast is the most important meal of the day and so that's why the Financial Times Breakfast Index is a compelling read at James Whelan's breakfast table." 8mins
ausbiz - Tesla takes the cake - 1st November 2021 - in this video, John Winters from Superhero goes through the most traded stocks and ETFs on their platform with BITO in the ETF space doing well (the bitcoin futures ETF from ProShares) as well as NDQ (the Nasdaq 100 ETF). 4mins
The Compound - Play Dumb, Get Rich | What are your thoughts? 2nd November 2021 - in this episode, Michael Batnick and Josh Brown go through news of the week from inflation protection to the large amounts of capital pouring into startups. In terms of markets, October results in the US were the best for that month seen in 6 years. Additionally, they go through ETF flow data and look at whether flows can impact prices and the answer appears to be yes. 44mins
Podcasts
ETF Edge by CNBC - The Active Passive Divide - In this episode, Bob Pisani and guests discuss the age-old battle between active management and passive strategies - armed with fresh data from Morningstar’s latest report. Overall, passive is still the big winner despite a very topsy-turvy couple of years. 35mins
ETF Prime - Evolution of ESG Investing - Per the show notes "Lara Crigger highlights 2021’s ESG ETF success stories and explains how the definition of ESG is evolving. Laura Segafredo and Sarah Greenberg discuss ESG considerations in investor portfolios, with a particular focus on climate change. Will Hershey offers a unique perspective on ETF ticker symbols and the importance of social media in the ETF business." 1hr6mins
Tweet of the week From Eric Balchunas of Bloomberg this chart shows the inflows into ETFs with the word inflation in their name. Is inflation the new craze? https://twitter.com/EricBalchunas/status/1455166956236156934
Chart of the Week If you don't follow Mike Akins from ETF Action you should thanks to charts like this where he shows what best performers were across the US ETF landscape - tweet here: https://twitter.com/etfAction/status/1454494098728042504
He also breaks down within ETFs what has performed well and not so well.
Further ETF Education iShares ETF Education Centre is in the mix this week so check it out where you can learn ETF basics and more - https://www.blackrock.com/au/individual/ishares/etf-education-centre
Access the ETFtracker App
Access to the newest version of the ETFtracker app is here: https://www.etftracker.com.au/the-app
ETFtracker Forum If you're not already a member of the ETFtracker Forum then please sign up - you can access conversations and share ideas amongst peers for free. Sign up is free: https://www.etftracker.com.au/forum
ETFtracker Podcast and Videos Before we go further, if you'd prefer to consume all this content in more convenient forms of media, we've launched The ETFtracker Show as a podcast and video and Exchange Traded Fridays comes at the end of each week. Additionally, we've launched a series of interviews with various ETF market participants.
You can also access the podcast directly on our website here: https://www.etftracker.com.au/podcasts
ausbiz
If you're interested in financial news you should check out ausbiz (sign up HERE) which has so much FREE financial and business content that comes out every day and has made it easier to follow your favourite topics and market experts. We get to feature on there and you can check out our page (and give us a follow) here: https://www.ausbiz.com.au/expert/mark-monfort?expertID=179
