Welcome to Issue 8 of Exchange Traded Fridays for the week ending 10th September 2021 and it's a big Friday for us we go on ausbiz later at 130pm today. We'll talk about the latest ETF statistics which came out from the ASX on Wednesday. Martin Dinh and team have been hard at work crunching the numbers and so have we.
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This week in local news the biggest piece was the latest market update and we crunch the numbers in an article on ETFtracker. We also take a look at the latest ETF from ETF Securities (SEMI) and more on what to look out for with ETFs from Morningstar. Globally, we saw news on Chinese crackdowns not dampening spirits for Asian ETF investments and more on bitcoin ETFs as well as direct indexing. Here's a summary of what else is in this newsletter. What's in this newsletter?
Articles - Local
Articles - Global
Tweet of the week
Chart of the week
ETFtracker App Updates
Listen or Watch
Articles - Local ETFtracker Blog - ASX Market Update - August 2021 - In this article we highlight the latest numbers we've crunched from the ASX. At a high level, nearly $123 billion in FUM is in the market now, driven by $3.5 billion of net inflows and performance was mostly positive with an average of +2.2% across the board. We explore this with a new and improved ETFtracker app and some new ETF snapshots (looking at ATEC and VGS in this case). Below you can see an animation of the new landing page, high-level snapshots, menus and ETF snapshots too.
Investor Daily - ETF boom to drive market cap $200bn - in this article it goes through some research from VanEck showing that market cap for ETFs is expected to reach $140 billion by the end of 2021 and that July was the biggest month of inflows on record for Aussie ETFS with $2.8 billion net inflows for that period. Their survey of investment manages showed that 89% of respondents would recommend ETFs to others as well. Investor Daily - Semiconductor ETF posts biggest 1st day in ASX history - ETF Securities launched their new ETF SEMI which tracks the Solactive Global Semiconductor 30 Index. It had $5m of flows on its first day which is the biggest first day of passive ETF in ASX history. Morningstar - ETFs are funds, not friends: Editor's Note - An article that came out Friday but important to highlight now especially as the trend for thematic ETFs continues amongst investors (millennials and otherwise). Emma Rappaport of Morningstar puts it well when she highlights that "when a new ETF is launched because it satisfies the latest trend or fad, ask yourself if that thematic has already substantially played out". This aligns with our belief at ETFtracker that it's important to look under the hood of any ETF no matter the name. Another piece that's interesting here is the highlighting of ticker names and how having memorable ones can help. She also highlights the Bloomberg article on the ticker grey market we flagged last week too (you can see that article here: Bloomberg - Hunt for Hottest Tickers Creates a New Gray Market on Wall Street The Australian - Alex Vynokur’s ETF provider Betashares hits $20bn milestone - in this Article, BetaShares founder Alex Vynokur highlights the growth of BetaShares ETFs from when they started in 2010 until now. As you can see from the chart below, up until the end of August, BetaShares FUM got up to $19.5 billion so they hit this milestone early this month. Congrats to them!
ETF Securities Weekly Monitor - Week Ending 3rd September - per ETF Securities notes this week: "Japan funds (HJPN and IJP), Asia tech (ASIA), domestic resources ETFs (MVR, QRE and OZR) and domestic small-cap funds (VSO and ISO) led the market higher last week. Leveraged funds aside, the week’s biggest decliners included US small and mid-cap funds (IJR and IJH), China (CNEW), US dollar (USD) and global banks (BNKS)."
Check out the link to this article for what else has done well.
Articles - Global Bloomberg - Chinese Crackdown Discounts Lure Investors Into Emerging ETFs - the article highlights how US ETFs focused on investing in China and Hong Kong saw $1 billion of inflows last week and how this has helped emerging markets ETFs this could be due to investors buying the dip but it could also be better than expected macroeconomic data out of that part of the world. Bloomberg - A Bitcoin ETF Is Likely Coming Soon. Is It Better to Just Buy Bitcoin? - Bull and Bear cases for a bitcoin ETF with some interesting points raised as investors who want bitcoin can just open up an app and buy it. That said, there are pros for having a bitcoin type ETF that can open up the world of institutional investing to cryptocurrencies. More of this back and forth in that article. Yahoo Finance - Is Invesco Dynamic Semiconductors ETF (PSI) a Strong ETF Right Now? - Quick but interesting article as we saw an Australian listed semiconductor play with ETF Securities SEMI. In this article it goes through this Invesco semiconductor play which is non-cap weighted and stocks are picked based on other criteria such as fundamentals. More details about the ETF and even alternatives are shown in the article. Financial Times - Morningstar joins race to provide direct indexing services - with this week's purchase of Moorgate Benchmarks by Morningstar, it marks a move into the world of direct indexing for the firm. As explained in the article, the concept of direct investing allows investors to create bespoke portfolios on investment factors or other parameters like ESG. It's been a niche service but is growing in size with the world leader in this space, Eaton Vance, acquired by Moran Stanley and BlackRock buying industry number 2 Aperio last year.
Videos ausbiz - Everything ETF: Look under the hood & D-Y-O-R - 8th September - Kanish Chugh talks about the ETF Securities ASX 300 Yield ETF (ZYAU) and its strong performance driven by the reopening trade and more. A need to understand exposure is key as well as looking under the hood. 8mins ausbiz - Everything ETF: is sustainable investing becoming just plain investing? - In this episode its all about ESG with Alex Holmes from BetaShares chatting about the subjectivity of ESG investing and what to look out for. Alex say to look for companies who are deriving earnings from sustainable and green investment revenues. 6mins ausbiz - What ASX reports taught credit investors - 3rd September - in this video whilst it missed last week's cut-off it's important for any credit investors. Brad from eInvest highlights that they're seeing positivity in the Australian corporate balance sheets across multiple industries as well as what signals they look for from companies. 5mins The Compound - Interest Rates Are Never Going Up Again | Animal Spirits 221 - We usually highlight The Compound and Friends show rather than Animal Spirits but both shows are awesome. They talk about Ray Dalio's performance, a bit on bitcoin and one of the host's (Ben Carlson) battle with Covid. They also highlighted how its interesting seeing the talk of these current markets being in a bubble when previous markets took a while to run up and recover (years compared to this current one). Perspective might make us less bearish there. 38mins
Podcasts Shares for Beginners - Kenny Polcari - The Global Financial Crisis - In this week's episode, Phil Muscatello chats with our good friend Kenny Polcari in the 4th and final part of his history of the NYSE (New York Stock Exchange). Kenny walks through how the NYSE handled the GFC and if you missed previous episodes you can catch up here: Episode 3 - Remembering 9/11 with Kenny Polcari Episode 2 - A Brief History of the NYSE Pt II 1987 – 2000 Episode 1 - A Brief History of the NYSE Pt I 1980 - 1987 Let's talk ETFs - 3rd September - Missed last week's cutoff by a day so it makes it in this week and it's on an important topic of ESG. In this Let's Talk ETFs podcast, Seeking Alpha speaks with Stephan Flagel, Chief Product Officer of Qontigo.to discuss how the ESG space is affecting exchange traded funds.
Tweet of the week
We got to fly the Aussie flag with this tweet from Nate Geraci from The ETF Store as he asked his followers about the best ticker they can think of. Whilst there are plenty of great ones here - we hope you liked our reply. https://twitter.com/NateGeraci/status/1435045579936174091
Chart of the Week - New ETF Snapshots in ETFtracker
This week it's all about the latest ETF market snapshots which give users an ability to quickly see what's going on across 6 key areas of an ETF. Explore more in the ETFtracker app.
Further ETF Education
VanEck on Smart Beta - In this portal from VanEck, investors can learn more about Smart Beta which is a commonly used term for some ETFs. According to their website 'Smart beta' is the term given to ETFs (Exchange Traded Funds) which track an index that differs from the traditional market capitalisation approach of selecting shares, bonds or other assets. Learn about this and more in the link above.
Access the ETFtracker Apps
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
Listen or Watch 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 ETFtracker Socials - YouTube, Spotify, Instagram, Twitter, TikTok We're on a few platforms (some more than others) so look up ETFtracker on your favourite platform for more.
Below is the Exchange Traded Fridays episode from last week.