ETF Securities Weekly Flows Analysis – Safe havens gain traction as trade war escalates
Highlights
Safe haven demand drives US$23.9mn into long gold ETPs and US$28.1mn into long silver ETPs.
Geopolitical risk led to US$21mn outflows from industrial metals basket.
Long crude oilETP inflows reach a seven-week high of US$20.6mn.
Trade wars escalate. When we first reported on the US tariffs, the Chinese retaliation was very limited, but we noted that it did not preclude further action. Last week we saw China announce a 25% tariff on 106 US goods targeting roughly US$50bn of imports (based on 2017 trade), matching the US’s target of US$50bn of Chinese imports into US. The tit-for-tat trade war has started. US President Trump then threatened a further set of tariffs on US$100bn of Chinese imports. This does not bode well for cyclical assets. Trade wars rarely end up with anyone as a winner. White House’s National Economic Council Director, Larry Kudlow’s, efforts to assuage markets worked temporarily, but lacked credibility after Trump made his recent treats. China said it will counter US protectionism “to the end and at any cost” after Trump’s threats, leaving little room to diffuse the impasse.
Safe haven demand drove US$23.9mn into long gold ETPs, US$28.1mn into long silver ETPs and US$6.9mn into broad precious metal basket ETPs. Inflows into gold have been over US$20mn for three weeks running as safe havens appear to be back in demand. In the past ten weeks there has only been one week of outflows from silver (a minor $2.6mn). In fact over the past (trailing) month, we have seen the highest inflows into silver since June 2017. Inflows into silver ETPs come as a sharp contrast to the investor sentiment in the silver futures market where net positioning is at its most negative ever. The escalation of a trade war adds to the political uncertainty following the hiring a Iran/North Korea policy hawk two weeks ago. With China being such an important broker of diplomacy between in the US and North Korea, antagonising the country appears risky a month before a potential meeting between Trump and North Korean leader Kim Jong-un. While gold prices have not appreciated meaningfully yet, the rising geopolitical risks could send its price substantially higher. Investors seem to be positioning in safe havens as a hedge against adverse outcomes. Friday’s worse-than-expected labour market report provided a tail-wind for gold as it reduces the need for the Federal Reserve to be hawkish.
Geopolitical risk led to US$21mn outflows from industrial metals baskets. Outflows from industrial metals reached an eight-week high. Cyclicals are likely to perform badly if global economic growth takes a hit from rising protectionism.
Long crude oilETP inflows reach a seven-week high of US$20.6mn. As crude oil prices fell 3.1% last week, investors bought long crude ETPs and took profits on their short oil ETP positions (US$3.3mn). While investors were bargain-hunting, we think that better entry points could open up. At current prices, we expect US production of oil to continue to rise. In its May meeting we expect OPEC to begin discussing how to taper off its current production curbs in 2019. The treat of a trade war should also weigh on oil prices if global demand is dented. Demand expectations from International Energy Agency already look too optimistic. It is a hard to imagine demand continuing to grow at the pace we saw last year at higher prices.
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Amundi MSCI World Minimum Volatility Screened Factor UCITSETFUCITSETFAcc (WMMV ETF) med ISIN IE0001DKJVC2, försöker spåra MSCI World Minimum Volatility Select ESG Low Carbon Target-index. MSCI World Minimum Volatility ESG Reduced Carbon Target-index spårar aktier från utvecklade länder över hela världen som är valda enligt låg volatilitet och ESG-kriterier (miljö, social och företagsstyrning). Indexet har som mål att minska utsläppen av växthusgaser och ett förbättrat ESG-poäng jämfört med jämförelseindex. Jämförelseindex är MSCI World-index.
Den börshandlade fondens TER (total cost ratio) uppgår till 0,25 % p.a. Amundi MSCI World Minimum Volatility Screened Factor UCITSETFUCITSETFAcc är den enda ETF som följer MSCI World Minimum Volatility Select ESG Low Carbon Target-index. ETFen replikerar det underliggande indexets prestanda genom fullständig replikering (köper alla indexbeståndsdelar). Utdelningarna i ETF:n ackumuleras och återinvesteras.
Denna ETF lanserades den 30 oktober 2024 och har sin hemvist i Irland.
Investeringsmål
Amundi MSCI World Minimum Volatility Screened Factor UCITSETFAcc försöker replikera, så nära som möjligt, oavsett om trenden är stigande eller fallande, resultatet för MSCI World Minimum Volatility Select ESG Low Carbon Target Index (”Indexet”). Delfondens mål är att uppnå en tracking error-nivå för delfonden och dess index som normalt inte kommer att överstiga 1 %.
Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel DEGIRO, Nordnet, Aktieinvest och Avanza.
· UBS Asset Management lanserar EUR och USD Treasury Yield Plus UCITS ETFer
· ETFerna syftar till att öka avkastningen samtidigt som riskegenskaperna hos deras referensindex bibehålls
· En egenutvecklad regelbaserad modell används för att bredda investeringsuniversumet för att förbättra tillgången till en större uppsättning möjligheter
UBS Asset Management (UBS AM) tillkännager idag lanseringen av två nya ETF:er som syftar till att leverera förbättrad avkastning, samtidigt som riskprofilen för deras underliggande statsobligationsindex bevaras. UBS EUR Treasury Yield Plus UCITSETF och UBS USD Treasury Yield Plus UCITSETF syftar till att överträffa sina respektive Bloomberg Treasury-index genom att rikta in sig på högre optionsjusterad spread (OAS), samtidigt som de bibehåller en strikt anpassning till duration, kreditkvalitet och landsexponering1.
Portföljkonstruktion
· Universumsdefinition: Varje ETF börjar med sitt respektive Bloomberg Treasury Index (EUR eller USD) och utökar uppsättningen möjligheter till att inkludera högkvalitativa statsobligationer, överstatliga obligationer och agentobligationer (SSA), vilka kan erbjuda en högre avkastning än statsobligationer. · Optimering: SSA-obligationerna väljs ut med hjälp av en egenutvecklad regelbaserad modell som maximerar OAS samtidigt som strikta begränsningar för rating, land, sektor, duration och kurvrisk följs.
· Dynamisk allokering: Portföljförvaltaren kan använda sitt eget omdöme för att ytterligare förbättra portföljens avkastning och/eller riskprofil.
André Mueller, chef för kundtäckning, UBS AM, sa: ”De snabbt ökande tillgångarna i förbättrade ränte-ETF:er signalerar en växande investerarefterfrågan på fonder som går utöver traditionella passiva riktmärken. UBS AM har långvarig expertis inom regelbaserade strategier, så jag är glad att vi för första gången kan erbjuda denna möjlighet till ett bredare spektrum av kunder genom det bekväma, transparenta och effektiva ETF-omslaget.”
Fonden är registrerad för försäljning i Österrike, Danmark, Finland, Frankrike, Tyskland, Irland, Italien, Liechtenstein, Luxemburg, Nederländerna, Norge, Spanien, Sverige, Schweiz och Storbritannien.