Highlighting the important role played by Authorised Participants (APs) in ensuring the liquidity of exchange-traded products (ETPs), London-based ETP providers Boost and Source have both recently added new APs to their ETP platforms. APs undertake the responsibility of creating and redeeming units in an ETP in the primary market.
‘ Europe ’
Russell Indexes has downgraded Greece to emerging market status as part of its annual index reconstitution process. The decision by Russell results from a three-year market risk review process in which Greece did not meet macro- and operational risk criteria for developed market status, but did meet classification criteria for inclusion in emerging markets.
BlackRock’s US-listed suite of iShares minimum volatility exchange-traded funds (ETFs) has breezed past $4bn in assets under management just 16 months after the ETFs were introduced. Launched on the NYSE Arca in October 2011, the ETFs help investors reduce volatility and improve risk-adjusted returns across domestic and international equity markets. iShares also recently introduced a similar line-up in Europe, listed on the London Stock Exchange and Deutsche Börse. Since debuting in December 2012, these ETFs have accumulated $68m in assets.
The success of exchange-traded funds (ETFs) has attracted a growing number of new providers to the market, offering investors a wealth of choice. Very often there are multiple providers offering ETFs on the same index. In theory, ETFs following the same index should provide very similar performance results. In practice, however, returns can vary. In this context, Lyxor, one of Europe’s leading ETF providers, has proposed a new efficiency indicator that takes into account performance difference, tracking error volatility and liquidity spreads.
Stoxx, a leading index provider, has reached its 15th anniversary. Part of the Deutsche Börse and SIX, the Zurich-headquartered firm launched its first own-branded indices on 26 February, 1998, in advance of the introduction of the euro single currency the following year. In the ensuing 15 years, Stoxx has developed from being the leading euro-focused index provider to becoming a global firm known for a range of innovative strategy indices.
Stoxx has announced that its flagship index, the Euro Stoxx 50, has been licensed to China Universal to serve as the basis for an exchange-traded fund (ETF). Shanghai-based China Universal is one of the fastest-growing asset managers in China, with assets under management of $9 billion. Although the Euro Stoxx 50 is one of the most widely tracked indices – there are currently 21 ETFs linked to the index globally – this is the first time that the blue-chip eurozone benchmark has been licensed to underlie an ETF in China.
FTSE Group, a leading global index provider, has introduced the FTSE Implied Volatility Index Series (IVI), a new suite of indices that measure the implied volatility of the UK’s FTSE 100 and Italy’s FTSE MIB stock indices. The indices will likely be seen as local equivalents of the widely followed CBOE Volatility Index (VIX).
FinEx, an international investment management group, has entered the European exchange-traded fund (ETF) market with the launch of the FinEx Tradable Russian Corporate Bonds UCITS ETF (FXRU), the world’s first ETF to provide dedicated exposure to Russian corporate debt. The fund has been listed on the Irish Stock Exchange and is cross-listed on the London Stock Exchange. Additional cross-listings on other major European exchanges are planned. Founded by industry veteran Simon Luhr, FinEx becomes the newest entrant in the fast-growing European ETF market.
Lyxor, a leading European provider of exchange-traded funds (ETFs), has launched the Lyxor ETF MTS Spain Government Bond All-Maturity (ES10), a new ETF providing low-cost exposure to Spanish government debt. The fund has been listed on the NYSE Euronext and is linked to the MTS Spain Government Bond Index, an index composed of government bonds of varying maturities issued by the sovereign government of Spain.
First Trust Advisors, a leading provider of exchange-traded funds (ETFs), is expected to launch into Europe sometime early this year. First Trust is the eleventh largest ETF provider in the US, with over $9 billion in ETF assets under management. The provider is perhaps best known for its popular AlphaDEX range of smart beta products, and it is this range that First Trust is understood to be planning to roll out in Europe, subject to regulatory approval.