Last week, Brazil officially eliminated a tax that affected foreign buyers of Brazilian government bonds. The elimination of the tax represents positive news for exchange-traded funds (ETFs) with exposure to Brazilian government debt. And while there isn’t yet a pure-play Brazilian government bond ETF on the market, a number of funds are set to benefit, most notably those that provide access to emerging markets local currency debt.
‘ Emerging and Frontier ’
S&P Dow Jones has announced the launch of the S&P Emerging Markets Volatility Short-Term Futures Index. The index measures the return from a daily rolling long position in first and second month futures contracts on the CBOE Emerging Markets ETF Volatility Index, an index measuring the implied volatility of options on the iShares MSCI Emerging Markets Index ETF (EEM).
MSCI, the world’s second largest provider of indices to exchange-traded funds (ETFs), has launched two new environmental, social and governance (ESG) indices – the MSCI Emerging Markets ESG Index and the MSCI ACWI ESG Index. The new indices, which have been designed to act as benchmarks for actively managed funds or underlyings for index-linked products such as exchange-traded funds (ETFs), reflect an increased emphasis among investors to incorporate ESG practices into investments.
Vanguard has expanded its presence in Europe with the cross-listing of seven Irish-domiciled exchange-traded funds (ETFs) on the NYSE Euronext exchange in Amsterdam and Paris. The Dutch and French debuts come less than two weeks after the asset manager broadened its European ETF line-up, which first launched in the UK in May 2012, and a little more than four months after it entered the Swiss market via listings on the SIX Swiss Exchange.
MSCI, one of the world’s largest providers of indices to exchange-traded funds (ETFs), has introduced the MSCI China A High Dividend Yield (HDY) Index, a new index measuring the performance of high yielding China A-shares. The new index includes stocks with a track record of sustainable and consistent dividend payouts and dividend growth, and is designed to serve as a benchmark for investors targeting the high-dividend yielding domestic China opportunity set or as the basis for index-linked financial products such as ETFs.
With China’s domestic exchange-traded funds industry growing at breakneck speed and its Mainland equity market steadily opening up to foreign investors, innovation surrounding Chinese indices has been a major theme so far this year. European index provider Stoxx, which earlier this year launched the market-capitalisation-weighted Stoxx China A 50 Index, has continued this theme with the introduction of the Stoxx China A 50 Equal Weight Index.
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.
Invesco PowerShares, a global provider of exchange-traded funds (ETFs), has announced the launch of the PowerShares Fundamental Emerging Markets Local Debt Portfolio ETF (PFEM). The fund provides investors with exposure to emerging market sovereign debt denominated in local currencies. Unlike most fixed income ETF indices, which typically use some form of market-cap weighting, the fund’s index is weighted based on constituent country’s economic footprint.