Chartwell Global ETF Report

By Carl Delfeld of the Chartwell ETF Advisor

The Australian exchange-traded fund (EWA) has rebounded sharply aided by the resilient Aussie dollar reaching new highs and steady performances by companies like BHP up 2.9% so far in today's trading. EWA is up 1.9% in mid-day trading today.

The Australian dollar reached its strongest level against the US dollar in nearly a quarter of a century on Monday, some commentators predicting it could reach parity in the coming months. Part of the demand for the currency is the carry trade whereby investors borrow in low interest currencies like the Japanese yen and invest in higher yielding currencies like the Aussie and New Zealand dollar.

According to the Financial Times, the Aussie jumped yesterday by more than one US cent, passing through the 90 US cent barrier to reach in Sydney at $0.9016, its highest level in 23 years. Yesterdays rise marks an extraordinary run for the Aussie, which dipped to $0.77 in August on subprime fears. It also hit a 10-year high against sterling yesterday.

The Australian ETF (EWA) has also benefited from being at the sweet spot of the commodity and Asian trading theme. BHP, the company with the largest weighting in the ETF basket, recently reported huge new exploration opportunities. Mr. Marius Kloppers will soon occupy the CEO chair so capably executed by Chip Goodyear. The talented management team of BHP should continue to drive growth in a conservative manner without costs getting out of hand.

The Australian ETF (EWA) has been a key holding in several of Chartwell ETF's portfolios.