In their weekly update on ETF flows, ETF provider ETF Securities’ director of commodities, Nitesh Shah (pictured), writes that both robotic and cybersecurity ETPs have seen stellar inflows since their inception.
Last week’s inflows of USD7.2 million and USD6.4 million respectively into robotic and cybersecurity ETPs marked the highest in five and three weeks, the firm writes.
“In the past year, robotic themed equities have returned close to 39 per cent, while cybersecurity themed equities have returned close to 21 per cent.”
Last week saw the fourth consecutive week of inflows into industrial metal basket ETPs, with USD13.2 million of inflows. Shah writes that a raft of upside surprises in Chinese data releases last week continued the positive momentum for industrial metals prices.
“Chinese industrial production, retail sales and GDP all beat expectations. China is the largest consumer of industrial metals and continued growth in its economy indicates that its demand for these commodities is unlikely to abate. We remain positive on Chinese economic growth at least until the end of this year as the country aims to maintain an even keel in the run-up to the 19th National Congress of the Communist Party of China.”
Last week’s inflows of USD17 million marked the third consecutive week of inflows into long silver ETPs. Meanwhile long gold ETPs saw outflows of USD28.5 million and long precious metal baskets saw outflows of USD5.6 million.
Shah writes that with continued signs of economic strength, investors have sided with silver as it has higher upside potential in periods of cyclical growth. “While we believe that gold will end Q2 2018 roughly flat at today’s levels, silver could rise more than 10 per cent and bring the elevated gold to silver ratio back down closer to historical average levels. We believe that upside inflation surprises will benefit both metals, but with greater industrial usage and continued mine supply deficit, silver is better positioned in this point of the economic cycle.”
Cyclical assets, particularly those that are exposed to commodities, saw investors buying USD7.7 million of commodity FX baskets, with the highest inflows since April.
Following an increase in policy rates by the Bank of Canada, the Canadian Dollar jumped to the highest level in 13 months, which could signal that demand for underlying oil demand is recovering. The Norwegian Krone has also appreciated to a nine-month high as the recent rally in oil prices has lifted the currency, Shah writes.
