ETF Securities Weekly Flows Analysis – China congress to potentially weigh on metal prices
Highlights
Precious metals ETPs recorded US$155mn inflows driven by inflows into gold, platinum and the basket ETPs.
Inflows into disruptive technology ETPs continue to grow on attractive valuation of the ROBO Global® Robotics and Automation UCITS Index compared to the MSCI World Technology Index.
Investors favoured exposure to the Eurozone to specific European countries as Brexit negotiations face a deadlock, increasing the uncertainty over the future relationship between the UK and EU.
Gold ETPs recorded inflows for the second consecutive week as the Chinese market reopened. Last week saw the price of gold rising to nearly US$1,300/oz after falling 6.3% from its 12-month high in early September. This could be a transitory recovery as the prospect of a rate hike and a stronger US Dollar is likely to weigh further on gold prices in the near term. We see the price of gold at US$1260/oz by year end. China auto sales rose by 3.3% year-over-year to September, benefitting platinum group metals. Platinum and palladium rose respectively 3.3% and 5.6% last week. Investors injected US$12.5mn into platinum ETPs as platinum ended last week at US$55/oz discount to palladium. The price of platinum has also been lagging the price of gold so far this year, rising by 4.8% versus 13.4% for gold year-to-date. We continue to believe in the potential catch-up of platinum in the near term.
Industrial metals saw inflows of US$16.5m as prices reached a 3-year high. The Bloomberg Industrial Metals Index has gained 23% since the beginning of the year, and 2.6% over the past week, reaching the highest level since the end of 2014. Flows into industrial metal ETPs have been choppy since the end of August, with large outflows recorded in September as prices declined 5% from the peak. Prices bounced back again in October despite Chinese markets being closed during the first week of the month. Inflows last week went mainly into the basket ETPs (US$22.8mn) and copper (US$5.9mn) while other industrial metal ETPs recording outflows. The China congress on Wednesday could put downward pressure on metal prices although market participants have been pricing it as a non-event so far.
Robotics and Cyber security ETPs continued to see steady inflows last week with US$23mn in the Robotic ETP and US$2mn in the Cybersecurity ETP. Our model shows that the ROBO Global® Robotics and Automation UCITS Index currently trades at a discount to the MSCI World Technology Index while the ISE Cyber Security® UCITS Index Net Total Return trades at a slightly higher level compared to its historical average, indicating that the Robotic ETP has higher upside potential.
European ETPs saw inflows of US$6.9mn mostly in short ETPs. Investors have increased their short exposure to individual European countries (France, UK and Germany) by US$8.4mn whilst increasing their exposure to the region at the same time with US$2.1mn into long EuroSTOXX ETPs. Investors appear somewhat polarised, the negotiations on the future relationship between the UK and the EU being in a deadlock as no agreement on the divorce bill has been reached.
Video Presentation
Edith Southammakosane, 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.
For more information contact
ETF Securities Research team ETF Securities (UK) Limited T +44 (0) 207 448 4336 E info@etfsecurities.com
Important Information
General
This communication has been provided by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (the ”FCA”).
This communication is only targeted at qualified or professional investors.
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.
Investeringsmål
Fonden strävar efter att uppnå långsiktig kapitaltillväxt från en portfölj som huvudsakligen består av aktier i företag med säte globalt.
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.