Welcome to Issue 20 of Exchange Traded Fridays for the week ending 3rd December 2021. Can you believe we are nearly done with 2021? What a journey it has been! Starting back in mid-July this year and leading all the way to now. It had initially just been something to do in order to share interesting news and grew to include a podcast to read through the news (recorded each Thursday night) and all shared at the same time. Read, watch, listen.
Given that it is the Christmas holiday period soon, we are going to put a hold to the podcast and videos of these newsletters until the new year. We'll still produce the weekly newsletter though so keep an eye out on that but it has been a pleasure to serve these up for our small but growing audience. Thank you!
Back to the news and this week in between inflation and Omicron Covid-19 variant concerns we saw a new ESG ETF thanks to Perpetual announcing their GIVE fund and they're soon to be launching an innovation fund too (ticker IDEA). We also the correlation between listed and unlisted private equity which gives strength to the GPEQ ETF from VanEck. We also saw the announcement of a new pair of crypto ETFs (Bitcoin and Ethereum) announced by ETF Securities to launch on Chi-X.
What's in this newsletter?
Local ETF Articles
Global ETF Articles
Tweet of the week
Chart of the week
ETFtracker App Links
Listen or Watch
Articles - Local
AFR - Graham Tuckwell ‘quietly hopeful’ of winning crypto ETF race - ETF Securities were the first to launch a gold based ETF and may well make a name for themselves with the first bitcoin ETF listing. They are looking to do so on the Chi-X exchange rather than ASX to get out to market quickly. First spot Bitcoin and Ethereum ETFs in Australia will certainly make some waves so make sure to check it out and register your interest.
AFR - Perpetual joins ETF ranks with ethical fund - There's a new ESG fund in town with the announcement that Perpetual Asset Management would launch hits Perpetual Ethical SRI Fund trading as ticker GIVE (got to love a good ticker name). It will be their first ETF and will be followed by their Global Innovation Share Fund which will trade under ticker IDEA.
VanEck - The correlation between listed private equity and unlisted private equity - In this article from VanEck they seek to answer the questions that have arisen about their new private equity ETF. The question was on whether the underlying index is any good as it tracks listed private equity rather than unlisted and the article shows the strong correlation between the LPX50 index and the index tracking all private equity companies listed and unlisted. Another advantage of this kind of exposure in an ETF wrapper is that unlike private equity, ETFs do not have long lockup periods.
AFR - How ETFs can underpin an equities portfolio - In this article from contributor Giselle Roux, the choice between active vs passive strategies for constructing an equity based are reviewed along with their pros and cons. Due to the underperformance of the former, investors have been flocking to the latter and the price action can be seen as more of a vote of popularity for the underlying stocks in that ETF rather than be based on fundamentals.
Article highlighting the potential influx of capital that could come Australia's way if it is able to launch a proper spot Bitcoin ETF before the US. It shows how the BITO bitcoin futures ETF was so popular in the stats even though it is not the spot price and how well CRYP and DIGA are doing for crypto company exposure in Australia (but still not spot crypto price). If we were to get a new asset class with these ETFs it could see an injection of new capital into markets here and the broader economy.
ETF Securities - Weekly Report - w/e 19th November - Per ETF Securities report - "ETFS Ultra Short Nasdaq 100 Hedge Fund (SNAS) was the week’s overall top-performing fund, up 7.5%. VanEck Vectors China New Economy ETF (CNEW) was the top-performing unleveraged fund, followed by US dollar funds as investors sought after the dollar. The poorest performers were ETFS Physical Palladium and BetaShares Crude Oil Index ETF - Ccy Hedged (OOO), down 12% and 10.4% respectively."
Articles - Global
CryptoPotato - Invesco Launches Bitcoin Spot ETP With German Stock Market Operator - The Deutsche Bourse announced that Invesco would launch a spot bitcoin ETF on their Xetra digital stock exchange. It has an expense ratio of 0.99% and will go by the ticker BTIC. This is in contrast to the US where the SEC has approved a futures not spot Bitcoin ETF and in Australia, ASIC has approved a spot Bitcoin ETF but none have yet listed on the exchanges.
Financial Times - $32bn Grayscale Bitcoin Trust feels the heat from cheaper ETFs - In this article we see that the large GBTC (Grayscale Bitcoin Trust) is trading at 15% below its NAV (value of its underlying assets) and this has come since bitcoin ETFs launched in Canada earlier in the year. 47 funds hold GBTC in their separately managed accounts and model portfolios as of September this year but the competing products to GBTC appear to pose a problem. GBTC had tracked the price of bitcoin quite well up until earlier this year when the supply and demand for the fund changed. Since GBTC is closed-ended, there are no market makers (like in ETF world) bringing the price more into line with the underlying asset. If GBTC can get their ETF conversion this might change but for now the charts look like this.
Bloomberg - Race for Metaverse ETF Launch Has Canada Calling a Tie for First - Canada's first metaverse ETF looks like a 2 horse race with the Evolve Metaverse ETF (MESH) and the Horizons Global Metaverse ETF (MTAV) both expected to trade on the TSX (Toronto Stock Exchange). The demand could be strong given the $806 million poured into the Roundhill Ball Metaverse ETF since mid-2021 (and seeing more flows post Facebook's name change to Meta).
per the show notes "Hydrogen-related firms have experienced explosive share price growth over the past year, benefitting from a clear shift in environment attention from the private sector. ETF Securities’ Gemma Weeks says that combined with substantial government grants and subsidies, falling costs of production, improved technology and plenty of publicity due to Fortescue Metals’ Future Industries’ move into the space, it’s little wonder why there’s so much investor excitement around the space." 5mins
ausbiz - Nervous? Here are some ways to protect your portfolio into 2022 - 30th November 2021 - In this video featuring David Lane from Ord Minnett, he highlights derivatives and ETFs that investors can use to protect against volatility. He also talks about asset allocation and the benefits of financial advice in situations like what we're seeing now. 8mins
ausbiz - Are China exposed ETFs a long term buy? - 30th November 2021 - In this video, Alistair Mills from BetaShares discusses movements in Chinese equities that are part of their various Asia focused ETFs . He points to Alibaba's 11/11 Singles Day and how much larger it is compared to Black Friday and Cyber Monday. Also, Alibaba (BABA) and JD.com (JD) set new sales records across their platforms this year with US$139B in sales, despite market concerns around increased regulation on advertising. 6mins
per the show notes - "Omicron has been the topic for investors since Friday as markets reacted to news of a new variant. James Whelan from VFS group said it wasn't the first variant that has occurred since COVID began but that didn't stop markets from panicking. However, he's not looking at COVID plays. James is far more interested in where the world is going and that's to the online metaverse." They talk about an ETF to cover this too, META. 7mins
Whilst not an ETF, this chat is of interest as it is about the world's first actively managed impact fund (Global Impact Initiative or GII) focusing on gender diversity. In this chat, Nadine speaks with GII's CEO, Giles Gunesekeera on a range of topics from the collaborations in the fund (Nobel Prize Winner Malala Yousafzai, Grameen, and World Vision) to there being no Australian company in its holdings, at least for now. 7mins
Next, we have a couple of videos which missed the cut last week so we show it here:
ausbiz - The market's newest exclusive club: hybrids - 25th November 2021 - in this video, Brad Dunn of eInvest talks to Nadine Blayney about the DHOF (Daintree Hybrid Opportunities Fund) and how there has been growing interest in hybrids as well as the TMD (target market determination) and its effects on financial product providers. 5mins
In this episode of ETF Battles you'll watch an audience requested skirmish between two growth stock ETFs - the ARK Innovation ETF (ARKK) vs. the Goldman Sachs Future Tech Leaders ETF (GTEK). Which ETF is the better play? 23mins
Trillions - ETFs Go Into the Metaverse - per the show notes "The day that Mark Zuckerberg announced he was changing the name of Facebook to Meta Platforms, the Roundhill Ball Metaverse ETF ($META) found a new trajectory. Since then, the ETF—which holds companies such as Nvidia, Roblox, Unity, Microsoft, and, well, Meta—has seen assets grow 6-fold and volume jump 50-fold. Much like $HACK, which also benefited from being the right idea at the right time, META is fast on its way to becoming a billion-dollar ETF—mostly because of a big news event." 48mins
CNBC - ETF Edge - The Next-Gen Investor - per the show notes "CNBC's Bob Pisani spoke with Anthony Denier, CEO of Webull, Andrew McOrmond, Managing Director at Wallachbeth Capital and Harry Whitton, Head of ETF Sales Trading at Old Mission Capital. They discussed the fallout from the market sell-off, will the emergence of a new Covid-19 variant add even more fuel to an already pro-growth, anti-cyclical trade in November? Plus, the popular trading app Webull - a rival to Robinhood - weighs in on sentiment as more young investors get into the ETF game." 28mins
Tweet of the week
From Cointelegraph we see this announcement that Invesco is creating a spot BTC ETF and listing it on the DeutscheBoerse - full tweet and comments here: https://twitter.com/Cointelegraph/status/1465580107414880263
Chart of the Week With DIGA, the Cosmos Global Digital Miners ETF providing not just cryptocurrency exposure but also great returns in October a(over 20%), it's worth looking at the performance of the underlying holdings in that ETF. Thanks to Google Finance and the holdings details from Cosmos, we can compare the top 5 holdings to see how they've faired over the last 6 months. Hut 8 Mining and Marathon Digital did the best out of these 5 and you can see how they compare in the chart of the week below.
Further ETF Education
We jump to State Street Global Advisers SPDR ETFs and their ETF Education page (available here) to look at the various articles they have available for those starting off in ETFs. If you're just getting started, this is worth a look.
Access the ETFtracker App
Access to the newest version of the ETFtracker app is here: https://www.etftracker.com.au/the-app
ETFtracker Forum and ETF Investing Australia 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
Over the last few weeks we've also been getting more involved in the Facebook group/forum space and whilst we're often seen commenting on Equity Mates discussion group and others we're also helping to run a newly formed and fast growing one called ETF Investing Australia. Set up a few months ago by Chad Maurer, this group is specifically focused on Australian ETFs so if you're interested in joining a group like this to learn more about ETFs, follow the link here: https://www.facebook.com/groups/3010730665825769
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
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