Bargain-Hunting Signals a Shift in Sentiment – ETF Securities Commodity ETP Weekly
Contrarian investors drive inflows into long crude oil ETPs to a 19-week high.
ETFS Agriculture (AIGA) receives highest inflows since October 2014.
ETFS Physical Palladium (PHPD) inflows highest since November 2014 and ETFS Physical Platinum (PHPT) inflows highest since January 2015.
Gold ETPs continue to be shunned as investors dispose of defensive assets.
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The US dollar continued to appreciate (Dollar Index up 0.4% in the week), weighing on the commodity complex. With the Federal Reserve signaling that it is ready to raise rates subject to seeing “some” further improvement in the labour market, this week’s payroll numbers will be keenly watched. A strong reading could see more dollar strength. A supply glut in oil has reversed the premature rebound in prices we witnessed between March and June, providing the setting for supply tightening in the months to come. Commodity ETPs tracking oil, agriculture and platinum group metals have seen their flows benefit from bargain-hunting. Negative sentiment against gold continues.
Contrarian investors drive inflows into long crude oil ETPs to a 19-week high. Marking the fifth consecutive week of inflows, we saw US$52.5mn of flows into long Brent and WTIcrude oil ETPs. When prices fell sharply between November 2014 and March 2015, we received strong inflows into oil ETPs as investors saw a bargain-hunting opportunity. The rebound in prices between March and June led to outflows as they took profit. The recent price declines are once again bringing bargain hunters back in the market. We believe the current low price environment will motivate cuts in capex amongst high cost producers and lead to higher prices over the medium term. Though, OPEC will continue to produce more oil as Saudi Arabia in particular seeks to gain market share. The nimble US shale oil industry will remain price responsive and will be able to increase production when prices rise. Most of the cuts in production will come from high-cost (e.g. deep-water, oil sand etc.) non-OPEC, non-US projects. Once those projects are deferred or even cancelled they will not come back quickly as they have long lead times. With OPEC operating so close to capacity, any shock to the market could lead to price spikes. Upside risks to price outweigh the downside at these levels. ETFS Agriculture (AIGA) receives highest inflows since October 2014. With agricultural prices falling across the board last week (and indeed over the month), bargain hunters have sensed an opportunity. With a strengthening El Niño weather phenomenon, the likelihood of a disruption to crop production is high, potentially reversing the price declines in certain agricultural commodities. We saw US$19.8mn flow into AIGA and a further US$5.4mn flow into long wheat ETPs (a 12-week high). Grain prices were particularly hurt last week as the International Grains Council increased its grain harvest forecasts, despite Canadian and European dryness.
ETFS Physical Palladium (PHPD) inflows highest since November 2014, ETFS Physical Platinum (PHPT) inflows highest since January 2015. Receiving inflows of US$30.6mn and US$16.9mn respectively, the platinum group metals gained traction after weeks of outflows and price declines. Improving fundamentals including tighter environmental regulation (a source of demand for PGMs) and constrained mine-supply bode well for the metals. Gold ETPs continue to be shunned as investors dispose of defensive assets. A further US$163.5mn of outflows from long gold ETPs last week highlights the extent of the rotation away from defensive assets and towards certain underpriced cyclicals. Key events to watch this week. As the US Fed prepares to raise interest rates it will be ultra-sensitive to the payroll numbers out this week. A strong reading could consolidate the case for a rate increase and drive the US dollar higher, which could normally weigh on commodity priced in US dollars.
Video Presentation
Nitesh Shah, Research Analyst at ETF Securities provides an analysis of last week’s performance, flow and trading activity in commodity exchange traded products and a look at the week ahead.
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Franklin MSCI World Catholic Principles UCITSETF USD Capitalisation (FLXA ETF), ISIN IE000AZOUN82, försöker spåra MSCI World Select Catholic Principles ESG Universal och Low Carbon-index. MSCI World Select Catholic Principles ESG Universal och Low Carbon Index spårar stora och medelstora värdepapper från utvecklade länder över hela världen. De utvalda företagen screenas enligt deras koldioxidexponering, deras ESG-profil (miljö, social och styrning) och katolska principer. Som ett resultat är företag som är involverade i vapen, hasardspel, vuxenunderhållning, abort, preventivmedel, stamcellsforskning och djurförsök uteslutna.
Den börshandlade fondens TER (total cost ratio) uppgår till 0,27 % p.a. Franklin MSCI World Catholic Principles UCITSETF USD Capitalization är den enda ETF som följer MSCI World Select Catholic Principles ESG Universal och Low Carbon-index. ETFen replikerar det underliggande indexets prestanda genom fullständig replikering (köper alla indexbeståndsdelar). Utdelningarna i ETFen ackumuleras och återinvesteras.
Franklin MSCI World Catholic Principles UCITSETF USD Capitalization är en liten ETF med tillgångar på 34 miljoner euro under förvaltning. Denna ETF lanserades den 24 april 2024 och har sin hemvist i Irland.
Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel DEGIRO, Nordnet, Aktieinvest, SAVR och Avanza.
2024 was a landmark year for bitcoin, solidifying its role as a fully institutionalised asset class.
Institutional inflows into physical bitcoin exchange-traded products (ETPs) reached nearly $35 billion globally, signalling a major shift in how traditional investors view crypto. As bitcoin continued to enhance portfolios’ risk-return profiles, more institutional investors followed suit, reshaping the financial landscape.
Looking ahead, 2025 promises to bring exciting developments across the crypto ecosystem. Here are the top five crypto trends to watch.
Fear of being left behind
The era of bitcoin as a niche investment is over. Institutional adoption is creating a ripple effect, forcing hesitant players to reconsider. Portfolios with bitcoin allocations are consistently outperforming those without, highlighting its growing importance.
Source: Bloomberg, WisdomTree. From 31 December 2013 to 30 November 2024. In USD. Based on daily returns. The 60/40 Global Portfolio is composed of 60% MSCI All Country World and 40% Bloomberg Multiverse. You cannot invest directly in an index. Historical performance is not an indication of future performance and any investment may go down in value.
With bitcoin’s ability to noticeably improve portfolios’ risk-return profiles, asset managers face a clear choice: integrate bitcoin into multi-asset portfolios or risk falling behind in a rapidly evolving financial landscape. In 2025, expect the competition to heat up as clients demand exposure to this powerhouse cryptocurrency.
Expanding crypto investment options
In 2024, regulatory breakthroughs opened the doors for physical bitcoin and ether ETPs in key developed markets. This marked a critical step towards making cryptocurrencies mainstream, providing seamless access to institutional and retail investors alike.
Figure 2: Global physical crypto ETP assets under management (AUM) and 2024 net flows
Source: Bloomberg, WisdomTree. 02 January 2025. Historical performance is not an indication of future performance and any investment may go down in value.
In 2025, this momentum is expected to accelerate as the crypto regulatory environment becomes more friendly in the United States and as key developed markets follow Europe’s lead and approve ETPs for altcoins such as Solana and XRP. With their clear utility and growing adoption, these altcoins are strong candidates for institutional investment vehicles.
This next wave of altcoin ETPs will expand the diversity of crypto investment opportunities and further integrate cryptocurrencies into the global financial system.
The maturing of Ethereum’s layer-2 ecosystem
Ethereum’s role as the backbone of decentralised finance (DeFi), non-fungible tokens (NFTs), and Web3 is unmatched, but its scalability challenges remain a hurdle. Layer-2 solutions—technologies such as Arbitrum and Optimism—are transforming Ethereum’s scalability and usability by enabling faster, cheaper transactions.
In 2025, Ethereum’s recent upgrades, such as Proto-Danksharding (introduced in the ‘Dencun’ upgrade), will drive layer-2 adoption even further. Innovations like Visa’s layer-2 payment platform leveraging Ethereum for instant cross-border transactions will underscore the platform’s evolution.
Expect Ethereum’s layer-2 ecosystem to power real-world use cases ranging from tokenized assets to decentralised gaming, positioning it as the infrastructure of a truly scalable digital economy.
Stablecoins: bridging finance and blockchain
Stablecoins are becoming indispensable to the global financial system, offering the stability of traditional assets with the efficiency of blockchain. Platforms such as Ethereum dominate the stablecoin landscape, hosting stablecoin giants Tether (USDT) and USD Coin (USDC), which facilitate billions in daily transactions.
Figure 3: Key stablecoin chains
Source: Artemis Terminal, WisdomTree. 05 January 2025. Historical performance is not an indication of future performance and any investment may go down in value.
As we move into 2025, stablecoins will increasingly interact with blockchain ecosystems such as Solana and XRP. Solana’s high-speed, low-cost infrastructure makes it ideal for stablecoin payments and remittances, while XRP Ledger’s focus on cross-border efficiency positions it as a leader in global settlements. With institutional adoption rising and DeFi applications booming, stablecoins will serve as the backbone of a seamless, interconnected financial ecosystem.
Tokenization: redefining ownership and revolutionising finance
Tokenization is set to redefine how we think about ownership and value. By converting tangible assets like real estate, commodities, stocks, and art into digital tokens, tokenization breaks down barriers to entry and creates unprecedented liquidity.
In 2025, tokenization will expand dramatically, empowering investors to own fractions of high-value assets. Platforms such as Paxos Gold and AspenCoin are already showcasing how tokenization can revolutionize markets for gold and luxury real estate. The integration of tokenized assets into DeFi will unlock new financial opportunities, such as using tokenized real estate as collateral for loans. As tokenization matures, it will transform industries ranging from private equity to venture capital, creating a more inclusive and efficient financial system.
For the avoidance of any doubt, tokenization complements crypto by expanding the use cases of blockchain to include real-world applications.
Looking ahead
2025 is set to be a defining year for crypto, as innovation, regulation, and adoption converge. Whether it is bitcoin cementing its position as a portfolio staple, Ethereum scaling for mainstream use, or tokenization unlocking liquidity in untapped markets, the crypto ecosystem is poised for explosive growth. For investors and institutions alike, the opportunities have never been clearer or more compelling.
This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
Fidelity Sustainable Research Enhanced Global Equity UCITSETFAcc (FGLR ETF) med ISIN IE00BKSBGV72, är en aktivt förvaltad ETF.
Denna ETF investerar i aktier från utvecklade marknader över hela världen. Värdepapper väljs ut enligt hållbarhet och grundläggande kriterier.
Den börshandlade fondens TER (total cost ratio) uppgår till 0,25 % p.a. Fidelity Sustainable Research Enhanced Global Equity UCITSETFAcc är den enda ETF som följer Fidelity Sustainable Research Enhanced Global Equity-index. ETFen replikerar det underliggande indexets prestanda genom fullständig replikering (köper alla indexbeståndsdelar). Utdelningarna i ETFen ackumuleras och återinvesteras.
Fidelity Sustainable Research Enhanced Global Equity UCITSETFAcc är en liten ETF med tillgångar på 45 miljoner euro under förvaltning. Denna ETF lanserades den 27 maj 2020 och har sin hemvist i Irland.
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Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel DEGIRO, Nordnet, Aktieinvest, SAVR och Avanza.