Exchange-traded funds have long been heralded for their ability to provide investors with security market returns at a reasonable cost. The missing link for many investors has been a method to turn these building blocks into a complete portfolio solution which caters to their individual needs and to do so cheaply and easily. Financial technology companies, such as London-based ETFmatic, are working to fill this niche through technology-driven asset-allocation solutions and low-cost ETFs. These innovative young firms look set to disrupt the staid ways of the UK wealth management industry.[continue reading...]
- Robo-advisors set to disrupt UK wealth management industry
- IndexIQ rolls out 50% currency-hedged ETF suite
- Relaxation of foreign stock ownership restrictions likely to boost Vietnam ETFs
- FTSE Russell launches 50% hedged international indices
- Boost adopts S&P 500 for 3x short and leveraged US large-cap ETPs
- Ossiam launches US sector value ETF based on Shiller Barclays CAPE index
- ETFs and hedge funds: At what price performance?
- ETFs surpass hedge funds in AUM
- IG, BlackRock to provide ETF managed portfolios
- Assets linked to EDHEC-Risk Institute’s smart beta indices pass $8bn
- European property ETFs continue to outperform in 2015
- Short gold ETPs surge as gold price tumbles amid heavy Monday trading
IndexIQ, a leading developer of alternative ETFs, in partnership with MainStay Investments, has announced the launch of three 50% currency-hedged international equity ETFs. “Our research has shown that 50% hedged portfolios have the potential to capture up to 80% of the risk reduction benefits of a fully hedged approach, while potentially securing steadier performance, regardless of exchange rate fluctuations,” said Chief Executive Officer and Co-Founder of IndexIQ, Adam Patti.
Exchange-traded funds linked to the Vietnamese equity market, such as Deutsche AWM’s db x-trackers FTSE Vietnam UCITS ETF (XFVT LN) and Van Eck’s Market Vectors Vietnam ETF (VNM), are likely to benefit from new regulations relaxing the restrictions of foreign stock ownership in Vietnam. The Vietnamese economy has been favoured lately by investors over other frontier markets due to consistent economic growth, favourable demographics, mass urbanization, strong foreign direct investment and ongoing reforms to state companies and the banking system. However, foreign ownership levels are already at their cap level for many major companies; a relaxation on these limits could provide significant increases in trading and liquidity levels of Vietnam-based ETFs.
FTSE Russell, a global index provider, has announced the launch of the FTSE 50% Hedged Index Series. The suite is designed for use in the creation of index-tracking funds, such as ETFs, and as a performance benchmark. Commenting on the launch, Ron Bundy, CEO Benchmarks North America, FTSE Russell, said: “In recent years currency exposure has become an increasingly important factor in global equity portfolios and our clients are asking for currency hedged benchmarks that go beyond the 100% hedge ratio available today. The FTSE 50% Hedged Index Series is designed to assist our clients in gaining a more complete understanding of the impact of currency in their international equity portfolios.”
Boost ETP, a leading European provider of short and leveraged exchange-traded products and a subsidiary of WisdomTree Europe, has changed the underlying index for its 3x short and leveraged US large-cap equity products. The products were previously linked to the Russell 1000 Index but are now referenced to the more widely followed S&P 500 Index. In line with the index change and to reflect the superior brand recognition of the S&P 500, the two ETPs have been renamed Boost S&P 500 3x Short Daily ETP (3USL) and Boost S&P 500 3x Leverage Daily ETP (3USS).
Ossiam, a leading provider of smart beta exchange-traded funds, has unveiled the Ossiam Shiller Barclays CAPE US Sector Value TR UCITS ETF on the London Stock Exchange, the latest in a suite of value-focused sector-rotation ETFs. The new ETF tracks the Shiller Barclays CAPE US Sector Value Index and builds upon the success of Ossiam’s European sector value ETF which was listed in February 2015. The underlying indices are based on the Cyclically Adjusted Price-to-Earnings (CAPE) ratio devised by Nobel Prize-winning economist Robert Shiller.
The spot price of gold sunk to $1,084 per ounce during Asian trading on Monday, its lowest price since November 2009. The futures market recorded excessively large trading volumes in a short period of time, about 20% of daily volume within a few minutes, causing the price of the yellow metal to sharply drop by 4%. Experts surmise that the timing of the trades indicate a direct desire to influence pricing in the market and likely reflective of a trader attempting to profit from a short position. Investors holding short leveraged ETPs tracking gold were well positioned to profit from the move: the Boost Gold 3x Short Daily ETP (3GOS LN) opened up 6.9%.
Deutsche Asset & Wealth Management (Deutsche AWM) has launched Europe’s first ETF to provide investors with physical exposure to China’s domestic sovereign bond market. The db x-trackers II Harvest CSI China Sovereign Bond UCITS ETF (DR), which has been listed on the Deutsche Börse with a London Stock Exchange listing to follow, is a physical replication ETF that tracks the CSI Gilt Edged Medium Term Treasury Note Index, an index reflecting the performance of tradeable Renminbi-denominated medium-term debt issued by the government of the People’s Republic of China.
Funds following European property markets have enjoyed a strong upswing since October 2014. The iShares European Property Yield UCITS ETF (IPRP), for example, netted gains of 25.3% from 1st October 2014 to end of April 2015. Similarly, the iShares Stoxx Europe 600 Real Estate UCITS ETF (EXI5) returned 25.2% over the same period. Growth in property prices has been widely dispersed across the Europe rather than isolated in a few major cities.
With ETFGI announcing that the ETF market has exceeded hedge funds this week, Tim Edwards, Senior Director of Index Investment Strategy at S&P Dow Jones Indices looks at why this might be the case. By replicating a hedge fund strategy and comparing it to the HFRI Weighted Composite benchmark he notes: After fees, the hypothetical hedge fund performs more or less in line with the benchmark; and the average hedge fund looks like a fixed blend of cheap investments, but at a high cost.