Source, a London-based provider of exchange-traded funds (ETFs), has announced the launch of the Source Morningstar US Energy Infrastructure MLP UCITS ETF on the London Stock Exchange. The ETF is linked to the Morningstar MLP Composite Index and is the first in Europe to offer dedicated exposure to US energy infrastructure Master Limited Partnerships (MLPs), which are booming as a result of the development of unconventional energy sources such as shale gas, tight oil and tar sands.
First Trust has made its ETF debut in Canada with the launch of three AlphaDEX ETFs on the Toronto Stock Exchange. The AlphaDEX methodology is a transparent, rules-based weighting methodology designed to exploit possible mispricings and potential drawbacks of market-capitalisation-weighted benchmarks. The methodology has proved hugely popular in the US, where ETFs linked to it have accumulated assets in excess of $4 billion.
SPDR ETFs, the exchange-traded funds platform of State Street Global Advisors (SSgA), has expanded its equity income line-up with the launch of global and pan-Asian ‘Dividend Aristocrats’ ETFs on the London Stock Exchange and Deutsche Börse (Xetra). Scott Ebner, head of global product development at SSgA, said: “Our approach to dividend investing at SPDRs has been centred around indices that not only favour high-yielding stocks, but also focus on the sustainability of yield”.
China’s first cross-border exchange-traded fund (ETF), the Guotai Nasdaq-100 ETF (513100), has begun trading on the Shanghai Stock Exchange. The fund is linked to the Nasdaq-100 Index and is sponsored by Guotai Asset Management, one of the longest-established fund management companies in China. The fund’s launch represents a significant development for the burgeoning exchange-traded product market in China.
By David Stevenson – Why are so few investors currently buying into consumer staples sector ETFs? I realise that this isn’t exactly one of those raging questions that ranks up there alongside “should we dump Europe?” and “why, oh, why are most of the singers on The Voice so bloody awful?”, but for investors I think the question really, really matters. To understand why I’m so nonplussed, let’s rewind the investment debate and establish some basic principles. The first and most basic principle is that investors worldwide are fearful about macro risk.
Asset class performance has been very mixed so far this year with currency volatility re-awakened and softening global economic data suggesting more difficult times ahead, according to Stephen Cohen, Head of iShares EMEA Investment Strategy & Insight. So what can investors do? Cohen proposes four strategies: overweighting defensive equities and equity income; using developed market equities to access emerging markets; playing Japan via a currency-hedged solution; and mitigating interest rate risk in fixed income and looking at local currency emerging markets debt.
The pioneering S&P 500 Equal Weight Index (EWI) and Guggenheim S&P 500 Equal Weight ETF (RSP) have marked their tenth anniversaries. Prior to their launch, the overwhelming majority of indices and ETFs were weighted by market capitalisation. And while market capitalisation weightings still dominate today, alternatively weighted approaches are becoming increasingly popular.
As the search for yield goes international, S&P Dow Jones Indices has announced that its S&P Pan Asia Dividend Aristocrats Index has been licensed to SSgA’s SPDR ETFs division for the launch of an exchange-traded fund (ETF) based on the index. Part of the popular ‘Dividend Aristocrats’ suite, the index measures the performance of the highest yielding Pan Asian companies that have followed a managed-dividends policy of increasing dividends for at least seven consecutive years. It includes constituents from both developed and emerging markets.
Exchange-traded funds (ETFs) linked to frontier markets, such as the db X-trackers S&P Select Frontier UCITS ETF, present an enticing proposition for investors. Inherently a long-term investment opportunity, they not only offer potential for strong returns, but also provide an ideal means of portfolio diversification. With 22% of the world’s population, of which almost 60% is under 30 years of age, abundant natural resources and low labour costs, frontier markets are “too significant to ignore”, says Tim Drinkall of Morgan Stanley Investment Management.
Northern Trust has expanded its line-up of FlexShares exchange-traded funds (ETF) with the launch of three dividend-oriented equity funds that pursue income potential and long-term capital growth from a universe of international developed and emerging market stocks. The new funds complement the provider’s existing ‘quality dividend’ suite, creating a diversified set of strategies.