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Impact of the EU Referendum

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8 år sedan

den

14 juni, 2016

Redaktionen

Market Insight – Foreign Exchange – Impact of the EU Referendum

Brexit possibility rekindled

After the “Remain” camp took a seemingly unassailable lead in voting polls towards the end of May, a bout of Sterling strength reflected market relief as a degree of uncertainty was removed from the upcoming vote. However, this reprieve turned out to be short lived, as six out of eight of the latest polls have shown the “Leave” camp ahead with an average lead of three percentage points (Source: FT Brexit poll tracker), rekindling investor concerns and stressing the considerable stakes at risk on June 23rd. Interestingly, average gambling odds (sample of 24 bookmakers analysed) have put the likelihood of a “Brexit” at around 30%, but this is unlikely to provide much comfort to market participants with assets to protect (see Figure 1). With a US interest rate hike looking increasingly unlikely this month, the EU referendum is the biggest event in the calendar and preparing portfolios adequately will be top of the agenda for investors. Below, we look at the primary assets that are likely to be impacted by the either outcome of the vote.

Sterling – Direct exposure

In the event of a “Brexit” the most immediate impact is likely to play out on currency markets, with the Sterling likely to see significant moves in either direction. Recently, the Sterling has been the clearest barometer of the market’s concerns over a “Brexit” scenario, having already fallen 9.1% since mid-November (on a trade weighted basis). The largest consideration over the decision to leave is the uncertain impact that it will have on the UK’s trading relationship with the EU, the largest consumer of its exports (EU accounts for 47% of UK exports, Source: ONS). Various scenarios outlined in academic studies by PWC, Oxford Economics and the Centre for Economic Progress (CEP) all predict UK trade to be adversely impacted by a decision to leave the EU, explaining why the Sterling is likely to be the primary victim should a “Brexit” materialise. As a vote to leave would be the first decision of its kind, market forecasts over the extent of a Sterling fall are disparate, ranging from 12% by the Treasury to over 20% by some sell-side analysts, such as Credit Suisse.

A “Remain” outcome would see postponed investment projects recommence and consumer/business confidence surge, offering potential support for the Sterling from current depressed levels. The UK’s strong reliance on its financial sector and large current account deficit makes the Sterling vulnerable to market volatility, but also means that the currency rallies when uncertain events pass or bouts of market instability abate (see Figure 2, EU referendum unveils Sterling opportunity).

UK equities – Financials and Real Estate vulnerable

For UK equities the outcome of the vote is likely to affect performance along multiple avenues. For the large firms that comprise the FTSE 100 index, a much smaller portion of revenues are generated in the UK compared to the broader FTSE 250 index. A “Brexit” scenario could provide a competitive boost for larger, more internationally focused firms through a weaker Sterling, but may hurt smaller enterprises that generate revenues domestically. In addition, for equity sectors that are vulnerable to the vote’s impact on the regulation of foreign activities and consumer confidence, like those in Financials and Real Estate, the outcome could spur significant moves.

Gold – Traditional hedge

Gold has traditionally been viewed as a safe haven investment, offering protection during periods of elevated uncertainty and market turbulence (see Figure 3). A vote to “Leave” is the result associated with the most uncertainty, and therefore is likely to see the market’s appetite for safe haven assets increase, which could be a supportive factor for the yellow metal. However, the gold price is less likely to experience a sharp reaction should the status quo in the UK be maintained, with investors instead turning their attention back to the US for any indications from the US Federal Reserve of further monetary tightening.

*All figures quoted are sourced from Bloomberg unless stated otherwise.

Important Information

This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (“ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (the “FCA”).

The information contained in this communication is for your general information only and is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision. Historical performance is not an indication of future performance and any investments may go down in value.

This document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a public offering of shares or securities in the United States or any province or territory thereof. Neither this document nor any copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States.

This communication may contain independent market commentary prepared by ETFS UK based on publicly available information. Although ETFS UK endeavours to ensure the accuracy of the content in this communication, ETFS UK does not warrant or guarantee its accuracy or correctness. Any third party data providers used to source the information in this communication make no warranties or representation of any kind relating to such data. Where ETFS UK has expressed its own opinions related to product or market activity, these views may change. Neither ETFS UK, nor any affiliate, nor any of their respective officers, directors, partners, or employees accepts any liability whatsoever for any direct or consequential loss arising from any use of this publication or its contents.

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China’s ETF outflows captured elsewhere in Asia

Publicerad

29 minuter sedan

den

23 november, 2024

Redaktionen

For years, India has been ramping up to contend with China as the region’s top technology leader. Pandemic-era supply chain issues hastened its successes in luring foreign tech firms. Now, equity investment flows are following suit. Dina Ting, Head of Global Index Portfolio Management at Franklin Templeton, highlights a few factors behind how the subcontinent is benefiting from rotational flows.

As China braces for renewed friction over President-elect Donald Trump’s tariff threats, investor flows may be following similar currents as those of regional supply chain shifts—that is to say, diversifying from China and toward opportunities in markets such as India and Japan.

After the People’s Bank of China revealed the most aggressive stimulus package it’s rolled out since the COVID-19 pandemic, China stock markets saw a short-lived rally at the end of September. A lack of detailed measures targeting consumption seems to have disappointed investors and led the bullish sentiment to deflate.

Adding to the country’s economic woes are societal changes like falling birthrates and a rapidly ageing population. Estimates by China’s National Health Commission suggest the country’s elderly population will grow to over 400 million by about 2035. To better cope with this crisis, China’s statutory retirement age will be extended, starting in January 2025, for the first time since the 1950s.

India investors, meanwhile, are finding the subcontinent—which has already overtaken China as the world’s most populous nation—appealing for its relative immunity to global risks, given its domestic-driven economy. Its younger labor force has also attracted a market pivot to this prime alternative to China manufacturing. For the 12-month period prior to China’s September 2024 stimulus announcement, US-listed India equity exchange traded funds (ETFs) garnered US$7.5 billion in flows—a sharp contrast to the US$6 billion in outflows experienced by China ETFs over the same period.1

Judging by India’s impressive initial public offering (IPO) environment, businesses there are feeling the optimism. The country’s 258 IPOs accounted for 30% of the global total by number by the end of September and 12% by the amount of money raised, in an economy that makes up just over 3% of global GDP.2

And investors in India are taking note. Aided by the improving digitalization of finance and increased internet access, India’s middle class is also an expanding retail investor class. By one measure, nationwide stock trading accounts nearly tripled from 2019 to 2023 to roughly 140 million.3

In dollar terms, total returns for Indian stocks have risen by 93% over the past five years, compared with about a 24% rise overall for emerging markets and drop of 5% for China stocks over the same period.

Many investors seeking to better diversify emerging market exposure or layer in targeted broad country allocation can tap single-country exchange-traded strategies.

Emerging markets in the Asia region are not the only beneficiaries of a potential US-China trade war. Earlier this year, investors were already driving up flows into Japan ETFs. Market watchers consider Japanese stocks to be indirect beneficiaries of Trump’s reflationary economic policy—which may keep interest rates high, thereby boosting the dollar and weakening the yen to the advantage of Japanese exporters.

The MSCI Japan Index is up nearly 21% in US dollar terms in the one-year period ending October 31, 2024. Consumer discretionary, financials and industrials holdings led gains during this time.

An element of uncertainty around the policies of a second Trump term, however, are still causing jitters around Asia, especially given the president-elect’s transactional approach to international relations.

Fortunately, Japan is seeing a renaissance in its semiconductor industry for which Tokyo is investing heavily (more than US$25 billion through 2025) and has established strong multilateral trade partnerships.

Japan has already elevated its role in global supply chain reorganization in recent years, and seeks to take advantage of its clout in joint free trade initiatives, such as the US’s Indo-Pacific Economic Framework for Prosperity to strengthen its regional supply-chain leadership.

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30IG ETF köper eurodenominerade företagsobligationer med förfall 2030

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1 timme sedan

den

23 november, 2024

Redaktionen

iShares iBonds Dec 2030 Term EUR Corporate UCITS ETF EUR (Dist) (30IG ETF) med ISIN IE000LX17BP9, strävar efter att spåra Bloomberg MSCI December 2030 Maturity EUR Corporate ESG Screened index. Bloomberg MSCI December 2030 Maturity EUR Corporate ESG Screened-index följer företagsobligationer i EUR. Indexet speglar inte ett konstant löptidsintervall (som är fallet med de flesta andra obligationsindex). Istället ingår endast obligationer som förfaller under det angivna året (här: 2030) i indexet. Indexet består av ESG (environmental, social and governance) screenade företagsobligationer. Betyg: Investment Grade. Löptid: december 2030 (Denna ETF kommer att stängas efteråt).

Den börshandlade fondens TER (total cost ratio) uppgår till 0,12 % p.a. iShares iBonds Dec 2030 Term EUR Corporate UCITS ETF EUR (Dist) är den enda ETF som följer Bloomberg MSCI December 2030 Maturity EUR Corporate ESG Screened index. ETFen replikerar det underliggande indexets prestanda genom samplingsteknik (köper ett urval av de mest relevanta indexbeståndsdelarna). Ränteintäkterna (kupongerna) i ETFen delas ut till investerarna (kvartalsvis).

Denna ETF lanserades den 9 maj 2024 och har sin hemvist i Irland.

Varför 30IG?

Exponering mot företagsobligationer i euro denominerade i investeringsklass, skattepliktiga, fast ränta och som förfaller mellan 01/01/30 och 02/12/30

Det är en investeringsperiod i fonden att andelsägare den 02/12/30 kommer att få sina andelar inlösta utan ytterligare meddelande eller aktieägargodkännande den 30/03/12

Indexet tillämpar skärmar som exkluderar emittenter som är involverade i följande affärsområden/aktiviteter: tobak, kärnvapen, civila skjutvapen, kontroversiella vapen, termisk kolbrytning, generering av termisk kolkraft, oljesand, konventionella vapen och vapensystem/komponenter/ stödsystem/tjänster.

Investeringsmål

Fonden strävar efter att uppnå avkastning på din investering, genom en kombination av kapitaltillväxt och inkomst på fondens tillgångar, vilket återspeglar avkastningen från Bloomberg MSCI December 2030 Maturity EUR Corporate ESG Screened Index, fondens jämförelseindex.

Handla 30IG ETF

iShares iBonds Dec 2030 Term EUR Corporate UCITS ETF EUR (Dist) (30IG ETF) är en europeisk börshandlad fond. Denna fond handlas på flera olika börser, till exempel Deutsche Boerse Xetra.

Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel DEGIRO, Nordnet, Aktieinvest och Avanza.

Börsnoteringar

Börs	Valuta	Kortnamn
XETRA	EUR	30IG

Största innehav

Emittent	Vikt (%)
BANQUE FEDERATIVE DU CREDIT MUTUEL SA	2.66
INTESA SANPAOLO SPA	2.54
VOLKSWAGEN INTERNATIONAL FINANCE NV	2.09
COMPAGNIE DE SAINT GOBAIN SA	1.95
MERCEDES-BENZ GROUP AG	1.82
VERIZON COMMUNICATIONS INC	1.82
VONOVIA SE	1.78
MIZUHO FINANCIAL GROUP INC	1.69
BANCO SANTANDER SA	1.35
PERNOD-RICARD SA	1.35

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LAAA ETF – Europas första CLO ETF

Publicerad

6 timmar sedan

den

23 november, 2024

Redaktionen

Fair Oaks AAA CLO Fund UCITS ETF EUR Dist (LAAA ETF), med ISIN LU2785470191, är en aktivt förvaltad ETF. Denna börshandlade fond ger tillgång till europeiska och amerikanska låneobligationer (CLO) med en AAA-rating.

Den börshandlade fondens TER (total cost ratio) uppgår till 0,35 % p.a. Fair Oaks AAA CLO Fund UCITS ETF EUR Dist är den enda ETF som följer Fair Oaks AAA CLO Fund index. ETFen replikerar det underliggande indexets prestanda genom fullständig replikering (köper alla indexbeståndsdelar). Ränteintäkterna (kupongerna) i ETFen delas ut till investerarna (kvartalsvis).

Fair Oaks AAA CLO Fund UCITS ETF EUR Dist är en mycket liten ETF med tillgångar på 2 miljoner euro under förvaltning. ETF lanserades den 10 september 2024 och har sin hemvist i Luxemburg.

Beskrivning

Fair Oaks AAA CLO Fund (“FAAA”, “Fonden”) erbjuder exponering mot exklusivt AAA-klassade Collateralised Loan Obligations (“CLOs”), med stöd av seniora företagslån. Fonden förvaltas aktivt med stor tonvikt på fundamental kreditanalys underifrån och upp. Fonden strävar efter att generera attraktiv riskjusterad avkastning genom att investera i och förvalta en portfölj av europeiska AAA-rankade CLO-sedlar på en lång och likvid basis. Fonden har inget jämförelseindex.

Höjdpunkter

Flexibel tillgång till den europeiska CLO-marknaden
Rörlig ränta AAA-klassad skuld
Attraktiv avkastning och defensiv meritlista genom flera marknadscykler

Handla LAAA ETF

Fair Oaks AAA CLO Fund UCITS ETF EUR Dist (LAAA ETF) är en europeisk börshandlad fond. Denna fond handlas på flera olika börser, till exempel Deutsche Boerse Xetra och London Stock Exchange.

Det betyder att det går att handla andelar i denna ETF genom de flesta svenska banker och Internetmäklare, till exempel DEGIRO, Nordnet, Aktieinvest och Avanza.

Börsnoteringar

Börs	Valuta	Kortnamn
Frankfurt Stock Exchange	EUR	LAAA
London Stock Exchange	EUR	FAAA
London Stock Exchange	GBP	AAAG
XETRA	EUR	LAAA

Största innehav

Namn	Vikt (%)
BECLO 5X B	4.2
OCPE 2017-1X ARE	3.4
CGMSE 2018-1X A2A	3.3
DILPK 1X A	3.3
BLUME 2016-1X BR	3.3
CFOUR 1X A	2.9
VOYE 6X AR	2.7
CRNCL 2021-14X A	2.7
CGMSE 2017-2X AA2R	2.7
AVOCA 18X B1	2.5