iShares launch Japan ESG ETF on LSE and Xetra

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iShares launches Japan ESG ETF on LSE and Xetra

The world’s largest exchange-traded fund provider iShares has launched an ETF offering currency hedged exposure to Japanese equities that have been screened for positive environmental, social and governance (ESG) characteristics. The iShares Sustainable MSCI Japan SRI EUR Hedged UCITS ETF (SUSJ) is trading on the London Stock Exchange in euros and British pounds, and on Xetra in euros. An increasing body of research is emerging that shows that by tilting towards companies exhibiting ESG strength, indices are better able to capture long-term sustainable returns by avoiding companies subject to social and environmental risks and favouring those which follow good management techniques. During 2015 the fund’s underlying index, the MSCI Japan SRI 100% Hedged to EUR Index, gained 12.34% compared to 9.90% for the MSCI Japan Index.

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Latest news

Accessing the Japan ETF market Spotlight on Japan-listed ETFs

The Bank of Japan’s exchange-traded fund buying scheme combined with ETF providers working with the government, has helped the Japanese ETF market boom with assets and flows now hitting record highs. Japan-listed ETFs and ETPs gathered a record US$9.24bn in net new assets in the first two months of the year. Nikko AM is an Asian headquartered company that has been managing assets in Japan for 55+ years. In 2001 it became one of the first asset managers to launch ETFs in Asia and now has a thriving ETF business. ETF Strategy takes a look at the London office and budding ETF business from the asset manager.

Matteo Andreetto, chief executive officer, Stoxx STOXX launches multi-asset indices for ETFs

Global index provider STOXX has launched a new range of multi-asset indices combining equities and fixed income. These indices can be used as an underlying for exchange-traded funds and should mean investors can construct portfolios according to individual risk preferences and various macroeconomic factors. The EURO STOXX 50 Multi-Asset Indices replicate a hypothetical portfolio which tracks the performance of the EURO STOXX 50 Index and the EURO STOXX 50 Corporate Bond Index. Matteo Andreetto, CEO of STOXX said: “These are the first indices in the STOXX offering which provide market participants with a highly liquid solution for diversification over two complementary asset classes.”

Deutsche Asset Management to move three fixed income ETFs to Bats Deutsche to move three fixed income ETFs to Bats

Exchange-traded fund provider Deutsche Asset Management has announced it will change the primary listing venue for three db X-tracker ETFs to the Bats Exchange, a leading electronic stock exchange. The funds are set to move on 9th June and include the Deutsche X-trackers Emerging Markets Bond – Interest Rate Hedged ETF (EMIH), Deutsche X-trackers Investment Grade Bond – Interest Rate Hedged ETF (IGIH), and Deutsche X-trackers High Yield Corporate Bond – Interest Rate Hedged ETF (HYIH) target exposure to the emerging markets, US investment grade, and US high yield fixed income markets, respectively while minimising interest rate risk through short positions in US Treasury futures.

First Trust launches active ETF trading in long and short commodity futures First Trust launches active ETF trading long and short commodity futures

US-based exchange-traded fund provider First Trust Advisors has launched the First Trust Alternative Absolute Return Strategy ETF (Nasdaq: FAAR), an actively managed ETF that seeks to profit from either long or short positions in select exchange-listed commodity futures contracts. “Absolute return offers the potential to provide long-term total return in a variety of market environments,” said John Gambla, Senior Portfolio Manager for the Alternatives Investment Team at First Trust. “Additionally, the strategy may offer low or no correlation to equities, bonds, real estate and long-only commodities.”

Equities

Solactive and Sarasin launch range of smart beta equity indices Solactive and Sarasin launch range of smart beta equity indices

Germany-based index provider Solactive AG and global thematic funds specialist Sarasin & Partners have unveiled a suite of five new indices targeting smart beta equity exposure in the UK, Europe, the US, and globally. The Sarasin’s Systematic Efficient Approach Indices, designed to provide core building blocks for asset allocators, seek to outperform the market-cap over the medium-long term and across multiple market cycles by tilting exposure to three proven drivers of return: momentum, low volatility and size. Steffen Scheuble, CEO, Solactive, commented in a statement: “Solactive is happy to announce our cooperation with Sarasin & Partners on the calculation of indices that not only aim to outperform country markets but also employ a sophisticated and proven methodology – a methodology that is passionate about obtaining a sustainable profit in the mid-long term.”

Commodities

VanEck's Gold miners GDX celebrates 10-year anniversary VanEck’s Gold Miners ETF celebrates 10 years

US-based exchange traded fund provider VanEck is celebrating the 10-year anniversary of its VanEck Vectors Gold Miners ETF (GDX). Hitting its decade anniversary yesterday, the ETF was not only the firms’ first fund but also the first ETF to focus on gold mining equities. GDX was originally designed to provide investors with a single point of access to a portfolio of companies in the global gold mining space. The ETF, which has a total expense ratio of 0.52%, now has nearly $8 billion in assets (as of the end of April) and is one of the most widely traded ETFs (and equities) in the market. It is part of 70 funds offered globally by VanEck.

Fixed Income

First Asset unveil Preferred Share ETF and Long Duration Fixed Income ETF on Toronto Stock Exchange First Asset launches Preferred Share ETF and Long Duration FI ETF on Toronto Exchange

Canadian exchange-traded fund issuer First Asset Investment Management has launched the First Asset Preferred Share ETF (FPR) and First Asset Long Duration Fixed Income ETF (FLB) on the Toronto Stock Exchange. FPR’s portfolio will consist primarily of preferred shares of North American issuers but may also hold investment grade corporate debt and convertible bonds, while FLB shall form its portfolio primarily of longer dated developed markets, Canadian and US government issued fixed income securities. Total expense ratios of 0.65% and 0.30% apply respectively.

Alternatives / Multi-Asset

First Trust launch smart beta equity income ETF on LSE First Trust launches US equity income ETF on LSE

Global exchange-traded fund provider First Trust has launched a UK-listed smart beta exchange-traded fund targeting US-listed dividend-paying stocks. Listed on the London Stock Exchange, the First Trust US Equity Income UCITS ETF (UINC) tracks the performance of the NASDAQ US High Equity Income Index, a modified value-weighted index designed to objectively select dividend-paying stocks from the NASDAQ US Benchmark Index. The fund maintains a quality tilt by excluding firms with excessive leverage and poor free cash flow ratios.

ETF and Index News

Bloomberg launches financial services gender equality index Bloomberg launches financial services gender equality index

Leading financial data provider Bloomberg has launched the Bloomberg Financial Services Gender-Equality Index, representing companies within the financial services sector that have adopted best-in-class policies promoting gender diversity. The launch is the latest addition to a string of index and investment product launches including exchange-traded funds that promote social equality. Angela Sun, Head of Strategy and Corporate Development at Bloomberg, commented: “Evidence demonstrates that gender-equality policies and practices can affect a company’s financial performance, productivity and ability to retain top talent.”