Gold Miners Monthly Report | October

Gold Miners ETF Monthly Report: Key Takeaways

During the month, there were parliamentary elections in Sweden and Italy. In both countries, there was a change of government, and especially the outcome of the Italian election will cause a strained situation within the EU. This as Giorgia Meloni, Italy's first female prime minister, will stand for a tough line with a focus on the individual/family and the motto "Italy first". [1]

The central banks continue to raise interest rates, which is now felt in most people's wallets. Companies are affected by higher borrowing costs, weaker consumer purchasing power, and increased difficulty in raising new capital with good terms. Higher energy prices and more expensive material purchases add further pressure on companies. A cocktail that can have a major impact on financial results and lead to more bankruptcies among companies. Unemployment may therefore increase, which in turn puts great pressure on politicians that will try to "fix" the situation.

Source of all data: AuAg Funds / Bloomberg / Sustainalytics / Solactive. Data as of 30.09.2022. Please note that all performance figures are showing net data. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product.

Macro Outlook

The strong dollar has continued its upward journey. Perhaps it has reached its peak and is about to reverse downward again, which likely would lift many asset classes. It has already created significant tensions in the global financial system. Many countries in emerging markets have loans in dollars that have become extremely costly and have increased their debt level in their local currency. The situation reminds us of what led to the Asian crisis in 1997. [2]

A problematic situation concerning several large banks has arisen, with Credit Suisse and Deutsche Bank in the spotlight. The market has punished the banks severely, and their share prices have plummeted. Even if banks have to go through a reconstruction before bankruptcy, there are very large volumes of various derivatives out there in the market that make everyone worried about unknown or counterparty risks that are not yet priced in. [3]

"The bear trap appears to be set", as we wrote on Twitter on 2022-10-02. COMEX positioning now looks like the final step in an epic market-rigging by the so-called "Commercials". We now have the lowest concentration of short positions for Commercials in history. Now, silver and gold have good conditions for a substantial price increase. At the same time, monitoring the Commercial's actions at the next rally is important. [4]

AuAg ESG Gold Mining UCITS ETF (ESGO) Performance Table (As of 30.09.22)

Performance before inception is based on back-tested data. Backtesting is the process of evaluating an investment strategy by applying it to historical data to simulate what the performance of such a strategy would have been. Back-tested data does not represent actual performance and should not be interpreted as an indication of actual or future performance. Past performance for the index is in USD. Past performance is not an indicator for future results and should not be the sole factor of consideration when selecting a product. Investors should read the prospectus of the Issuer (“Prospectus”) before investing and should refer to the section of the Prospectus entitled ‘Risk Factors’ for further details of risks associated with an investment in this product. Source: Bloomberg / HANetf. Data as of 30/09/2022. Please note that all performance figures show net data. 

Composition / Holdings

Portfolio Holdings Target Weight Allocation. Live percentage may differ due to holdings change of value/cash flows. In the ordinary rebalance the above composition will be implemented over a period starting on 30.09.2022 cob and ending on 05.10.2022 cob. The new composition will be fully reflected in the index with opening on 06.10.2022.

Source of all data: AuAg Funds / Bloomberg / Sustainalytics / Solactive. Data as of 30.09.2022

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