Exchange Traded Funds
During George Washington’s presidency, a battle of words captivated the public as a series of back and forth essays (way longer than 140 characters) appeared in the press about executive power, debt and the central bank. The ‘trolling’ included personal barbs between Thomas Jefferson and Alexander Hamilton, Washington’s Secretary of the Treasury. Jefferson, when he became President, took on the press who he claimed had injured his reputation. The Supreme Court decision was split 2-2, which was a victory for Jefferson. The US economy flourished despite a quarrelsome executive and uncertainty about its powers. Over 200 years later, the war of words continues and markets are reacting emotionally. Remaining invested through turbulence is important and investors are better equipped today than they were 200 years ago.
ultimately most profitable investment actions are by definition contrarian:
You’re buying when everyone else is selling (and the price is thus low) or
you’re selling when everyone else is buying (and price is high).”
- Howard Marks (Oaktree Capital
Transurban’s recent strong results and upgraded
dividend guidance highlight infrastructure’s strength
The good news for gold is that markets are now beginning to reflect reality, following the irrational euphoria that followed the Trump election.
US wide moats boasted impressive performance during the first month of 2017.
Australian investors have long had an affinity for domestic equities. According to IMF’s Coordinated Portfolio Investment Survey, only the US has a more significant home country bias. Australia’s propensity was reflected in 2016’s ASX ETP flows. The other notable data in the 2016 exchange traded product flows is that smart beta ETFs are gaining popularity among Australian investors.
Both trends are likely to continue as a number of Australian equity smart beta ETFs outperformed in 2016 and are well positioned for 2017.
Last year VanEck’s Australian Equal Weight ETF (ASX code: MVW) outperformed the S&P/ASX 200 Index and well positioned to continue its impressive performance because it is:
2016: A strong year for moats
Strong year for gold despite post-election stress
Global growth on positive trajectory
Wide moats outperform in November
Gold suffers as irrationality Trumps reality
Navigating the bloody battle of 2016
The Mysterious Affair of 2016
Are you a speculator or an investor?
Honey, I shrunk the resources