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Andy Sparks, head of fixed income research strategies, MSCI

MSCI: How easy is it to track a bond market index?

By Andy Sparks, head of fixed income research strategies, MSCI.

Many investors may have only a qualitative understanding of the ability of passive fund managers to track the returns of a fixed-income index. Our analysis uses tracking error to provide a quantitative measure of the ease – or difficulty – of consistently tracking an index. We find generally low to moderate tracking error across broad parts of the bond market. Our analysis also suggests that less liquid and higher volatility sectors (such as high yield) tend to have higher tracking error.

ERI Scientific Beta rolls out multi-strategy smart beta indices

Assets tracking Scientific Beta indices top $25bn

Smart beta index provider ERI Scientific Beta has announced that assets tracking its indices reached $25 billion at the end of December 2017, up substantially from 30 June 2017 when assets under replication amounted to $16bn. Professor Noël Amenc, CEO of Scientific Beta, said, “[The indices] remain based on the double diversification of factor and specific risks, and do not sacrifice the latter in favour of a concentrated portfolio optimised in-sample.”

Invesco cross-lists three Powershares fixed income ETFs on SIX

Invesco cross-lists three PowerShares fixed income ETFs on SIX

Invesco has cross-listed three PowerShares fixed income ETFs onto SIX Swiss Exchange, each tracking Bloomberg Barclays indices. The ETFs offers exposure to US dollar-denominated corporate bonds, euro-denominated corporate bonds, and dollar-denominated emerging market sovereign bonds.

Direxion introduces lightly leveraged “Portfolio+” ETF suite

Direxion introduces lightly leveraged “Portfolio+” ETF suite

US-based leveraged and inverse ETF specialist Direxion has debuted a new range of ETFs, under a new brand called “Portfolio+ ETFs”. The ETFs provide lightly leveraged exposure to their underlying indices. Andy O’Rourke, Managing Director at Direxion, said, “Over time, a small amount of added exposure can make a significant difference. At the right price point, just a 25% boost allows advisors who already manage a diversified strategy to seek out additional risk-adjusted returns in a manageable way. “

Vanguard CEO Tim Buckley.

Vanguard unveils suite of actively managed factor ETFs in US

Vanguard has launched six new factor-based ETFs — the firm’s first actively managed ETFs in the US — on Cboe ETF Marketplace. The suite consists of five single factor funds, targeting exposure to the minimum volatility, value, momentum, liquidity, and quality factors, and a multi-factor approach, each within the US equities universe. Vanguard CEO Tim Buckley, commented, “The newly launched factor funds represent a differentiated approach – disciplined, rules-based, targeted exposure to factors – along with Vanguard’s low costs.”

UBS launches accumulating share class for MSCI World SRI ETF

UBS launches accumulating share class for MSCI World SRI ETF

UBS Global Asset Management has introduced an accumulating share class for its UBS MSCI World Socially Responsible UCITS ETF on Deutsche Börse’s Xetra and Frankfurt exchanges.

Equities

Amundi cross-lists four ETFs on the SIX

Amundi cross-lists equity ETFs on SIX

Amundi has cross-listed two equity ETFs onto SIX Swiss Exchange, further expanding its Swiss offering. One of the funds to be cross-listed tracks the EURO STOXX 50 and has been made available in three separate share classes. The other tracks the CAC 40.

Commerzbank launches STOXX Europe 600 ETF on Deutsche Börse

Commerzbank launches STOXX Europe 600 ETF on Deutsche Börse

Commerzbank, the German bank behind the ComStage line-up of ETFs, has launched a new fund on Deutsche Börse’s Xetra and Frankfurt exchanges, offering exposure to the STOXX Europe 600 Index.

Commodities

Severe weather causing a storm in agricultural ETPs

Severe weather causing a storm in agricultural ETPs

London-based commodity ETP specialist ETF Securities has reported that weekly inflows into its agricultural ETPs reached their largest levels ever last week, totalling $54.7 million. The firm notes that the majority of agricultural commodities are trading higher in 2018 owing to severe weather conditions affecting forecasts of supply.

WisdomTree: How to trade the Brent/WTI oil spread using short and leveraged ETPs

WisdomTree: How to trade the Brent/WTI oil spread using short and leveraged ETPs

By Nick Leung, research analyst at WisdomTree in Europe.

A widening oil spread presents trading opportunities for oil investors. In this brief, we examine how short and leveraged oil ETPs can be used to efficiently trade oil price movements.

Fixed Income

Gene Frieda, executive vice president and global strategist at PIMCO.

PIMCO: Regime change in bond markets?

By Gene Frieda, executive vice president and global strategist at PIMCO.

With a steady repricing of global bond markets having contributed to a sharp plunge in global stock markets, there could be a whiff of a new era in the air. Given the failure of both markets and central banks to forecast inflation accurately, we should all be humble about the level of precision attached to the timing or nature of the bond market’s next chapter.

Deutsche adds USD high-yield corporate bond ETF to fixed income suite

Deutsche adds USD high-yield corporate bond ETF to fixed income suite

Deutsche Asset Management has expanded its fixed income ETF range with the listing of the db x-trackers USD High Yield Corporate Bond UCITS ETF (XUHY LN) on London Stock Exchange and Deutsche Börse. Blanca Koenig, Deutsche AM fixed income ETF strategist, said, “The new USD high-yield ETF expands the toolkit available to investors to address today’s market challenges.”

Alternatives / Multi-Asset

Source launches real estate ETF on Deutsche Börse

Vanguard REIT ETF changes its index

Vanguard has changed the underlying index for the Vanguard REIT ETF (VNQ US) from the MSCI US REIT Index to the MSCI US Investable Market Real Estate 25/50 Transition Index, including a broader scope of real estate related companies such as those involved in services and development.

BlackRock launches dividend and buyback ETF on Cboe

Mind your P’s and F’s: Don’t confuse leveraged ETPs with ETFs

By Martin Small, Head of US iShares at BlackRock

As the recent market volatility made clear, there’s a big difference between plain vanilla ETFs and leveraged products making big bets with big risks.

ETF and Index News

Canada Toronto ETFs

Canadian ETF industry see highest asset growth in almost two years

Assets invested in ETFs listed in Canada grew by $4.9 billion in January 2018 to reach a record high of $122bn at the end of the month, according to ETF industry consultants ETFGI. The surge in assets represents the greatest absolute monthly increase for the Canadian ETF industry in almost two years.

Taeyong Lee, President, Global Head of ETFs for Mirae Asset

Mirae anchors US presence by buying ETF provider Global X

Global X, the seventeenth-largest US-based ETF issuer, has entered into an agreement to sell 100% of its fully diluted shares to Mirae Asset Global Investments, an independent financial services business based in Asia. “With Global X on board, we are now connecting one of the most successful US ETF firms to a prominent Asian-based global ETF manager, creating a powerful ETF platform.” said Taeyong Lee, president, global head of ETFs for Mirae Asset.