ETF Express Newsletter 08.11.24

Crypto assets set to benefit from Trump win in the US

ETF issuer reactions to this week’s news of the election of Donald Trump in the US has focussed on the likely advantages his tenure will bring to crypto assets.
Bitwise’s ETC Group wrote: "The latest US election results imply that the political sentiment has significantly shifted towards a pro-crypto stance in the US and will likely accelerate the mainstream adoption of cryptoassets," while CoinShares’ James Butterfill writes: "The key focus here is on the prospects for the Bitcoin Act's approval, especially given that Republicans are expected to gain control of both the House and the Senate. This act proposes holding bitcoin as a strategic reserve asset, with the US government potentially acquiring 5 per cent of the bitcoin supply."
Fear of inflation seemed to lie behind many American voters’ support of Trump and we have Peter Taberner examining what ETFs work best in a high inflation cycle. Commodities are the answer, he finds, quoting Philippe Ferreira, the deputy head of economics and cross-asset strategy at Kepler Cheuvreux, says: "In a high inflation environment, commodities such as GSG US Equity did very well in 2022 because inflation was inflated by the commodity shock related to the Ukraine and Russia war.
"This also backs the idea that commodities are an inflation hedge, as long as inflation is related to a commodity supply shock."
The rest of our stories this week celebrate the huge asset flows seen into European ETFs this year with PwC Luxembourg reporting EU-domiciled ETFs surged from EUR1.47 trillion to EUR1.72 trillion between December 2023 and June 2024, reaching record-breaking growth. The firm found that ETFs have gained in popularity over more traditional, active funds. Meanwhile, the SIX Swiss Exchange also reported record ETF growth in October.
This is going to be a stand-out year for ETFs in terms of asset raising.
Finally, we are pleased to bring you a discount for a London-based responsible investment conference. This code, ETF20, will gain you a 20 per cent discount on tickets to attend RAO Global’s symposium on 21st November in London. The event details are here.

Beverly Chandler, Managing Editor
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