A flight to safety spurred US dollar and gold exchange-traded funds (ETF) higher, making them the best-performing assets in their class in November, according to a Morningstar report.
The BetaShares US Dollar ETF, which trades under the Australian Stock Exchange (ASX) code USD, rose 7.05 per cent in November, making it the best performer over the month, Morningstar co-head of fund research Tim Murphy said.
“This was largely on the back of risk aversion causing a flight to the relative stability of a reserve currency such as the [US dollar] and, conversely, weakness in the [Australian dollar] on the back of commodity price softness and declining interest rates in Australia,” Murphy said in the December edition of ETFMonthly.
ETFS Physical Gold, which trades under the ASX code GOLD, was the second best over the month, up 4.68 per cent. Gold fell in US dollar terms, but rose in terms of the Australian dollar, which weakened against its US counterpart.
However, the BetaShares Gold Bullion ETF, which carries the ASX code QAU and is hedged, eased over the month in line with the gold price.
“The weakening [Australian dollar] helped drive outperformance from a number of ETFs with unhedged foreign assets,” Murphy said.
Meanwhile, the total number of completed ETF trades climbed over the month to 22.09 million from 21.67 million in October. However, total ETF assets stood at $5.07 billion as of 30 November 2011, down slightly from the end of 2010.
Murphy said there were 12 new ETF product launches over the year, bringing the total on offer to 58.
“The new products have diversified the suite of available options, providing exposure to specific segments of the share market as well as to alternative investments and currencies,” he said.
“There were no new ETF providers over the year, although there probably will be as a result of the likely introduction of fixed-income ETFs in 2012.”
