Weekly Market Monitor – Week Ending 4 November 2022

  • The best performing ETFs last week focussed on China, as markets bounced back from Xi Jinping’s reappointment. Among them was the Global X Green Metal Miners ETF (GMTL), which features Chinese stocks heavily due to its investment in rare earths processing companies.
  • Technology ETFs heavily constituted the bottom performers, as earnings for major tech companies – like Meta (Facebook) and Amazon – disappointed.
  • There were $1.2 billion in reported inflows. This figure likely exaggerates the true weekly flow as it includes Vanguard’s flows for the whole prior month. As with previous weeks, currency hedged ETFs (VGAD, REIT, WXCH, IHVV, VBND) were among the biggest flow winners, signalling Australians believe the AUD is undervalued.
  • There were $164 million in reported outflows, meaning the industry saw another net inflow week. Assets that are geared to low interest rates – bonds (VACF, XARO), gold (GOLD, QAU), geared equity ETFs – made up the bulk of outflows, suggesting Australian ETF investors believe interest rates will stay higher.
  • The most heavily traded ETFs overlapped heavily with those that saw the most inflows. This indicates that most trades being made were – in effect – dip buying.

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