Weekly Market Monitor – Week Ending 10 March 2023

  • Short US equity funds (BBUS, SNAS) topped the performance charts last week as the banking sector crashed, catalysed by the collapse of the crypto-inclined Silvergate Capital, then worsened by the lead up to Silicon Valley Bank’s US$200 billion demise. Carbon credit ETFs (GCO2, XCO2) also outperformed as southward polar winds brought about a cold snap in northern Europe causing energy demand to rise.
  • Blockchain and crypto ETFs (CRYP, EBTC, EETH) were the poorest performers of the week, again due to the collapse of Silvergate Capital, a major lender in the institutional crypto space. Sparked by the dramatic implosion that was FTX, Silvergate had come under a slew of bank-runs, political pressure, and regulatory questionings over the past six month. The final nail in the coffin? A delayed annual report. Enough to destroy any last vestige of client confidence and leading ultimately to the bank’s voluntary liquidation.
  • There were $280.9 million in reported inflows last week. Bond and income ETFs (IGB, IAF, BILL, SUBD, QPON, USTB) received the lion’s share of flows as investors fled equity exposures, opting for safer assets instead.
  • There were $291.9 million in reported outflows for the week, marking the first week of reported net outflows for the industry year-to-date. Over 60% of the outflows were from one fund, the iShares S&P/ASX 200 ETF (IOZ).
  • Large broad index tracking funds (VAS, IOZ, IVV, VGS, A200) were the theme across the top traded funds as usual. Income and bond ETFs also experienced major volumes (AAA, IAF).

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