ETF Securities – Robotic ETFs continue to see inflows

Highlights

• US$15mn into robotic themed equity ETFs.
• Industrial metals – buying on price dips.
• Arabica coffee ETPs attract US$6.8mn – the highest since October 2017 – as investors bargain-hunt.
• Crude oil ETPs resume outflows.

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US$15mn into robotic themed equity ETFs. Last week’s flows marked a 3 week high. Investors are increasingly enthusiastic about the role of robotics in the modern world and have identified an investment opportunity in the companies that enable the deployment of this technology.

Industrial metals – buying on price dips. Broad industrial metal ETPs received a second consecutive week of inflows (US$5.0mn) as investors bought on price dips. Long copper ETPs received US$8.7mn of inflows. These inflows were at a 4-week high. The International Copper Study Group’s latest set of data released last week showed that world mine production declined by 2.4% in the first eleven months of 2017, while world refined production is estimated to have slightly increased by 0.5% in the first eleven months of 2017. The International Copper Study Group expect another year of supply deficits in 2018 as supply remains tight while demand increases. Copper’s role in electrification of vehicles (upgrading of electrical networks and increased use of wiring in cars) presents a strong structural tailwind for the metal. Nickel ETPs continued to see inflows (US$34.3mn). Nickel also benefits from the electrification of vehicles (see Commodity Research: Nickel – electrification may boost demand)

Arabica coffee ETPs attract US$6.8mn – the highest since October 2017 – as investors bargain-hunt. With a cooler Southern Hemisphere summer, the prospects for heat damage to this year’s coffee crop is reduced. Coffee yields are likely to rise and stocks are likely to be replenished after withdrawals last year. However, should weather conditions turn or crops disease increase, this narrative will no longer apply and prices could rise. Investors appear to be trying to find bargains.

Crude oil ETPs resume outflows. While in the prior week we saw the first inflows since July 2017, outflows resumed last week (a modest US$2.9mn out of long oil ETPs). As prices bounced 3.9%, investors took profit. Rig counts in the US have been rising for five consecutive weeks, highlighting the extent to which US supply will keep rising if prices remain this high.

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