Robotics-related ETPs saw inflows of US$51mn last week, the largest weekly inflow on record……
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– US dollar long positions have seen outflows of US$40mn over the last two months
– Agricultural ETPs saw outflows of US$40mn last week, focussed on wheat and corn
Robotics-related ETPs saw inflows of US$ 51mn last week, the largest weekly inflow on record, bringing assets under management to over US$1bn for the first time. This follows a successful earnings season, and now that 92% have reported, we have seen earnings and sales break their 2015 highs after a period of weakness. From a quarter-on-quarter perspective the 3D printing sub-sector has been weak but this impact has been minimal with overall earnings having grown 17.7%, beating expectations by 12%. Valuations have remained static at 29x P/E, in-line with its long-term average relative to the MSCI World Tech sector.
The threat of a Federal Reserve rate hike in December prompted gold outflows of US$43mn last week after a run of inflows totalling US$450mn over the last two months. Despite the outflows, we believe gold remains popular due to a continued lack of appetite for the US dollar, rising geopolitical fears primarily related to North Korea and fear of the potential impact of unwinding monetary policy.
US dollar long positions saw outflows of US$40mn over the last two months, this has primarily been against the Euro. We believe this reflects investor worries over President Trump’s ability to implement potential tax cuts coupled with continued positive economic data from the Eurozone.
Crude oil saw another week of outflows totalling US22mn. Of the 21 weeks since July, 20 were weeks that saw outflows, which now total US$694mn, representing 43% of the current assets under management. We believe this signifies increasing investor scepticism over the sustainability of current oil price levels. We also believe that the most recent OPEC deal to extend the production freeze will have minimal impact in the longer-term. At the current pace of expansion in the US, the global supply deficit will be short-lived. We believe there will be a production surplus by Q1 2018. Furthermore, Russia remains concerned that propping up prices through the production curbs has allowed US production to rise and consequently why inserted in to the new OPEC agreement is an option to review the deal in June 2018. With Brent crude now trading at US$63/bbl, we believe that compliance levels could slip once again as it becomes tempting to produce that little bit more at higher prices.
Agricultural ETPs saw outflows of US$40mn last week, focussed on wheat and corn, we believe this is due to recent reports of higher yields than expected in both the US and Russia. The outflows are the largest seen since July 2015.