8 ETF themes to buy now?

ETFs (like the equity indexes on which they’re based) haven’t had a great start to the year. But not all ETFs just buy broad country and global indices. In this article, Rodney Lay from Risk Return Metrics lists “eight ETF-based themes that investors, subject to their world view, may wish to consider from a tactical asset allocation perspective.”

March 07, 2022 09:37

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Rodney Lay

Risk Return Metrics

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Global equities markets started to stumble in January, and then fell flat on their face in February as Russia invaded Ukraine and caused uncertainty and alarm around the world.

Investors who were already on edge thanks to the risks of inflation and the end of the recent stock market resurgence have now gone decidedly into "risk-off" mode. As of this writing, about 70% of the largest US stocks that make up the S&P 500 index are in the red year to date. Some big names like Meta Platforms Inc. (ticker: FB) and Netflix Inc. (NFLX) alone have lost more than 30% since 1 January.

ASX-listed global equities ETFs / ETMFs (exchange-traded funds and exchange-traded managed funds) have not performed well since the beginning of the year, and indeed the active ETF global equities vehicles have been slammed the most.

Where can investors turn in this environment?

This article lists eight ETF-based themes that investors, subject to their world view, may wish to consider from a tactical asset allocation perspective.

It has been the proliferation and diversification of ETF / ETMF vehicles over the last few years in the Australian market that now enables investors to execute more detailed and precise tactical asset allocation decisions.

8 ETF themes and specific ETF exposures

Gold (ASX: GOLD, PMGOLD, QAU, GDX, MNRS);
Agricultural Commodities (ASX: FOOD);
Oil (ASX: OOO, FUEL);
Cybersecurity (ASX: HACK);
Active Fixed Interest ETMFs;
Shorting Equities (ASX: BBUS, SNAS);
USD/AUD Appreciation (ASX: USD, YANK);
Volatility Dampening (ASX: WVOL, WRLD).

Gold Bullion and Gold Miners ETFs

Softs / Oil / Cybersecurity ETFs

The Big Short

Download the PDF to access the full ETF Flows report

Click on the pdf below to access charts and content supporting the 8 thematic propositions.

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