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.
‘ ETF and Index News ’
So far this year low-volatility exchange-traded funds have been among the industry’s best selling products, pulling in some $6.5 billion in net new assets in the first quarter. In keeping with this theme, S&P Dow Jones has continued the build out of its low-volatility index family with the launch of the S&P Korea Low Volatility Index. The new index seeks to measure the performance of the 50 least volatile stocks in the S&P Korea BMI.
FTSE Group, a London-based global index provider, has revealed that assets under management in exchange-traded funds (ETFs) linked to the FTSE EPRA/NAREIT Global Real Estate Index Series have surpassed $10 billion. The index series is one of the most widely followed gauges of property and real estate investment trust (REIT) performance and has been adopted by numerous ETF sponsors, including iShares, Lyxor, Deutsche Bank and First Trust.
S&P Dow Jones has expanded its Latin American product offering with the launch of the S&P MILA Financials and S&P MILA Resources indices. The indices are designed to measure the primary equity sectors represented on the MILA (or Mercado Integrado Latino Americano) market. The MILA is a regional equity trading platform integrating the main stock exchanges of Chile, Colombia and Peru.
NYSE Euronext, a leading exchange operator and index provider, has celebrated the 10th anniversary of its Intellidex Indices. The indices, which debuted in 2003, were designed to identify those stocks within a particular market segment that have the greatest potential for capital appreciation. Following their immediate licensing to Invesco PowerShares, to serve as the basis for a range of ‘Dynamic Portfolios’ exchange-traded funds (ETFs), the indices were among the first ‘smart beta’ benchmarks to be adopted by the ETF industry.
S&P Dow Jones Indices has unveiled the S&P 500 Buyback Index, a new index tracking the performance of the S&P 500 constituents with the largest stock buyback programmes. The methodology behind the index, which has been designed to underlie index-linked products such as exchange-traded funds (ETFs), is refreshingly simple. Essentially, the index measures the performance of the top 100 stocks with the highest buyback ratio in the S&P 500 in the last 12 months. It has outperformed the S&P 500 over one, three and five years.
Stoxx, a leading index provider, has introduced the Euro Stoxx 50 BuyWrite 100% Index. The index measures the performance of a buy-write or covered-call strategy based on the Euro Stoxx 50 Index, the eurozone’s leading blue-chip equity index. The new index, which has been designed to underlie index-linked financial products such as exchange-traded funds (ETFs), represents a hypothetical portfolio of a long position in the Euro Stoxx 50 and a sold – or written – call option based on the same index.
By David Stevenson – My old Uncle Fred was nothing if not brutally honest – every week I’d pop along to see him in his wonderfully clean care home and tell him my latest idea that would change the world. He’d snort loudly and derisively, draw deeply on the 28th fag of the day and then warn me that just because you think it’s a good idea and say so loud enough regularly, doesn’t mean anyone will actually do anything about it! Uncle Fred’s brutal pessimism still lingers in my mind as I survey the vaulting ambitions of the ETF industry.
S&P Dow Jones Indices, a leading index provider, recently unveiled the S&P GSCI Risk Weight, an index measuring the performance of the broad-based S&P GSCI commodities index on a risk-weighted basis. The index takes into account the contribution of each commodity sector to the overall index risk in order to avoid concentration in any one sector and build the most diversified index in terms of individual sector risk contributions.
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.