The rapid rise in coronavirus cases continue to weigh on markets as the number of cases inch toward 14.5 million cases globally. The broader US equity market continued its climb higher with the support of industrial-focused stocks as the tech-sector lost pace. Global financial markets ended the week mixed as concerns over the economic impact from the pandemic, coupled with signs of a resurgence of the virus weighed on global economies.
In the News
- The coronavirus pandemic continues to hog the headlines as number of cases globally comes close to 14.5 million.
- With almost 4 million cases being reported in the US alone, market sentiment took a dip as states rolled-back their reopening of businesses. However, markets were quick to get back on its feet at the middle of the week as optimism for a vaccine nudged equity prices higher.
- The technology sector took a breather last week after enjoying a strong climb this year. The NYSE FANG+ Index has risen 54.3% since the start of the year. The fears of a resurgence are expected to keep prices well supported, with expectations for a continued climb given its stronger fundamentals.
- After enjoying strong gain in the previous week, China’s equity market tumbled despite encouraging economic data. Reports were attributing the sell-off to investors locking in gains, and the rising trade tensions between the US and China.
- Despite the challenging external factors, China has emerged as the 1st major economy to shift back into positive economic growth after the pandemic, with the support of increased fiscal spending, exports (primarily health care, semiconductors, and personal computer equipment), and the rebound of its property market.
- On-going trade tensions between China and the US continue to loom over global markets and dampen sentiment. The recent move by President Trump to end Hong Kong’s preferential trade treatment was not taken well by China.
- The broader China indices slid lower with the Shanghai Composite Index seeing a -4.99% return in MYR terms over the week whilst the CSI300 Index slid 4.38% lower. The S&P New China Sectors Ex A Share Index was not spared by the sell-off, though the magnitude of its dip was marginally less as it slid 3.97% lower over the same period to drag its YTD performance to a positive 20.46% in MYR terms.
- Gold saw marginal movement in its price last week after a strong climb since the start of the year. Prices remained supported above the USD 1,800 per ounce level, and remains one of the strongest performing asset class this year, leading to the 0828EA to see a YTD gain of 22.62% this year.
On the Economic Data Front
- US economic data surprises on the upside:
- Jobless claims continue to roll-in above the 1 million mark, signalling a long road to recovery for the US job market.
- Consumer spending saw an uptrend, with a rise of 7.5% in retail sales.
- Manufacturing production jumped by 7.5% in June, its largest gain since 1947.
- More money for Europe:
- The ECB kept its monetary policy unchanged in a wait and see move.
- Talks amongst the EU leaders took place to discuss details on the proposed EUR 750 billion EU recovery fund as the continent looks for ways to address the effects from the pandemic.
- French President Macros announced that another EUR 100 billion will be pumped into the economy to aid its recovery. The funds are said to be prioritised for efforts to stem unemployment.
- China’s data points encouraging:
- GDP grew by 3.2% YoY in the 2nd quarter of the year, a vast improvement from the 6.8% contraction seen in the 1st quarter.
- Industrial production improved by 4.8% YoY in June, marking its 3rd straight month of gains
- Retail sales slumped 1.8% in June as demand waned.
- 2 new ETFs were listed on the Bursa Main Market on the 15th of July:
- TradePlus DWA Malaysia Momentum Tracker; and
- TradePlus MSCI Asia ex Japan REITs Tracker.
- The ETFs are part of TradePlus’ Smart Beta series which utilises factor-tilts in its benchmark to put in place an active touch on an passive strategy.
ETF strategies at TradePlus
- To Hedge:
- 0828EA – a Gold-backed ETF widely used as a storage of value in times of market uncertainty.
- 0833EA – a HSCEI Inverse strategy that helps hedge your portfolio against weakness from the performance of China companies listed on the HKex.
- 0831EA – the NYSE FANG+ Inverse strategy that hedges against the performance of tech stocks listed in the US.
- To Add Position:
- 0829EA / 0829EB – a strategy that gives investors exposure into the consumer focused sector through China companies listed in HK, and the US.
- 0832EA – a 2X leveraged strategy on the HSCEI that captures 2 times the performance of China companies listed on the HKex.
- 0830EA – a 2X leveraged strategy on the NYSE FANG+ that captures 2 times the performance of US listed tech stocks.
- 0836EA – a Malaysian focused strategy with a portfolio of 20 names that are selected using the momentum factor tilt.
- 0837EA – a REITs focused strategy that selects its underlying using the high dividend factor tilt to invest into sustainable and higher dividend paying REITs listed across the Asia ex Japan region.
A look at the performance of the TradePlus ETFs, and major global indices
Learn more about TradePlus ETFs
Disclaimer: This article has been prepared by AHAM Asset Management Berhad (“AHAM Capital”) specific for its use, a specific target audience, and for discussion purposes only. All information contained within this presentation belongs to AHAM Capital and may not be copied, distributed or otherwise disseminated in whole or in part without written consent of AHAM Capital. The information contained in this presentation may include, but is not limited to opinions, analysis, forecasts, projections and expectations (collectively referred to as “Opinions”). Such information has been obtained from various sources including those in the public domain, are merely expressions of belief. Although this presentation has been prepared on the basis of information and/or Opinions that are believed to be correct at the time the presentation was prepared, AHAM Capital makes no expressed or implied warranty as to the accuracy and completeness of any such information and/or Opinions. As with any forms of financial products, the financial product mentioned herein (if any) carries with it various risks. Although attempts have been made to disclose all possible risks involved, the financial product may still be subject to inherent risk that may arise beyond our reasonable contemplation. The financial product may be wholly unsuited for you, if you are adverse to the risk arising out of and/or in connection with the financial product. AHAM Capital is not acting as an advisor or agent to any person to whom this presentation is directed. Such persons must make their own independent assessments of the contents of this presentation, should not treat such content as advice relating to legal, accounting, taxation or investment matters and should consult their own advisers. AHAM Capital and its affiliates may act as a principal and agent in any transaction contemplated by this presentation, or any other transaction connected with any such transaction, and may as a result earn brokerage, commission or other income. Nothing in this presentation is intended to be, or should be construed as an offer to buy or sell, or invitation to subscribe for, any securities. Neither AHAM Capital nor any of its directors, employees or representatives are to have any liability (including liability to any person by reason of negligence or negligent misstatement) from any statement, opinion, information or matter (expressed or implied) arising out of, contained in or derived from or any omission from this presentation, except liability under statute that cannot be excluded.
Warning Statement: A copy of the Prospectus / Supplemental Prospectus for the TradePlus Shariah Gold Tracker and TradePlus S&P New China Tracker, the Prospectus for the TradePlus DWA Malaysia Momentum Tracker and TradePlus MSCI Asia Ex Japan REITs Tracker, as well as the Master Prospectus for the TradePlus NYSE® FANG+™ Daily (2x) Leveraged Tracker, TradePlus NYSE® FANG+™ Daily (-1x) Inverse Tracker, TradePlus HSCEI Daily (2x) Leveraged Tracker and TradePlus HSCEI Daily (-1x) Inverse Tracker (collectively known as the “TradePlus L&I ETFs”) can be obtained at Affin Hwang Asset Management's (“AHAM Capital”) website at www.tradeplus.com.my. Investors are advised to read and understand the contents of the Prospectus dated 28 November 2017 and Supplemental Prospectus dated 2 July 2019 (for TradePlus Shariah Gold Tracker), Prospectus dated 15 January 2019 and Supplemental Prospectus dated 2 July 2019 (for TradePlus S&P New China Tracker), Prospectus dated 9 July 2020 (for TradePlus DWA Malaysia Momentum Tracker), Prospectus dated 9 July 2020 (for TradePlus MSCI Asia Ex Japan REITs Tracker), as well as the Master Prospectus dated 26 November 2019 (for the TradePlus L&I ETFs) before investing. There are fees and charges involved when investing in the funds stated herein. Investors are advised to consider and compare the fees and charges as well of the risks carefully before investing. Investors should make their own assessment of the risks involved in investing and should seek professional advice, where necessary. The price of units and distribution payable, if any, may go down as well as up and past performance of the funds should not be taken as indicative of their future performance. The Securities Commission Malaysia has not reviewed this material and takes no responsibility for the contents of this material and expressly disclaims all liability, however arising from this material.
You may refer to the relevant Licensing Disclosure Statement & Conditions at the respective webpages for each fund available on www.tradeplus.com.my.