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.
‘ Volatility ’
Global inflows into exchange-traded products (ETPs) slowed a little in April 2013 to $10.3 billion, according to the latest ETP Landscape report from BlackRock. However, as of April month end, ETPs have seen inflows of $79.9 billion in the year to date, which is more than $13 billion ahead of the $66.3 billion of inflows collected during the same period last year. This is despite a major setback for gold ETPs, which have been hit with outflows of almost $18 billion.
Smart beta is a term that seems to have suddenly emerged out of nowhere to describe the rise of a new form of ‘passive’ investing. The very words themselves conjure up a certain egg-headed technical prowess, implying that all the other beta trackers out there are just “back of the class” dullards, market capitalisation based, one-trick ponies that don’t do all the clever stuff that smart beta trackers can accomplish with their quantitative prowess. Scratch beneath the surface though and we discover a slightly more honest admission by the ETF industry.
David Stevenson has joined ETF Strategy as a weekly columnist. David is the author of the popular Financial Times Guide to Exchange Traded Funds and Index Funds and writes for the FT, Investors Chronicle and Investment Week. “I’m really excited to be writing a regular weekly column for ETF Strategy – in a very short period of time this online publication has established itself as the best source of analysis and research for investors who use ETFs here in Europe. Over the next year I can guarantee you that there’ll be many more developments at ETF Strategy, so watch this space!”, said Stevenson. In his debut column he considers European equity ETFs.
BlackRock has announced that its iShares exchange-traded funds (ETFs) business, the world’s largest, has expanded its factor ETF line-up with the launch of two sets of products: the iShares MSCI Factor ETFs, which track specialist smart beta indices, and the iShares Enhanced ETFs, which are actively managed using BlackRock research rather than tracking an index.
Ossiam, a leading provider of smart beta exchange-traded funds (ETFs), has made its low-volatility global equity ETF, the Ossiam ETF World Minimum Variance NR, more accessible to Swiss investors via a listing on the SIX Swiss Exchange. The new listing, which includes both euro and US dollar trading lines, complements the fund’s existing listings on the London Stock Exchange, NYSE Euronext Paris, Borsa Italiana and Deutsche Börse.
VelocityShares, a US-based provider of exchange-traded products best known for its VIX ETNs, has rolled out three exchange-traded funds (ETFs) providing exposure to various emerging markets via American Depositary Receipts and Global Depositary Receipts. The funds, which have been listed on the Nasdaq Stock Market and are linked to BNY Mellon DR Indices, provide access to broad emerging markets, emerging Asia, and Russia.
PowerShares S&P 500 Low Volatility ETF surpasses $4 billion, reflecting appeal of low-volatility strategiesMar 18th, 2013 | By Simon Smith, CFA
Invesco PowerShares, a leading global provider of exchange-traded funds (ETFs), has revealed that assets under management in the highly popular PowerShares S&P 500 Low Volatility Portfolio ETF (SPLV) have surpassed $4 billion. The fund tracks the S&P 500 Low Volatility Index, an index consisting of 100 stocks selected from the S&P 500 Index with the lowest realised volatility over the past 12 months.
The newly launched Global X SuperDividend US ETF (DIV) is the latest fund to be introduced by Global X Funds, a New York-based provider of exchange-traded funds (ETFs). The NYSE Arca-listed fund combines two highly popular investment styles – high dividend and low volatility – by providing exposure to an equally-weighted portfolio of 50 high-income, low-beta equity securities traded in the United States.
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.