Archive for February 2013

Morningstar research provides insight into ETF tracking efficiency

Feb 7th, 2013 | By
One-fifth of European "active" equity funds are closet trackers, finds Morningstar

Providers of index-tracking UCITS exchange-traded funds (ETFs) will be required by European regulation to disclose predictions of their ETFs’ tracking error and tracking difference. Providers will also have to explain any divergence. In recognition of these requirements, Morningstar has produced a report which examines the factors influencing tracking efficiency in ETFs. Among the key findings are that, in general, ETFs have done well in limiting tracking error and that those using synthetic replication typically produce lower tracking error than those using physical replication.


ISE and IndexIQ team up to develop physical commodities ETPs

Feb 7th, 2013 | By
Commodities super-cycle far from over, asserts ETF Securities

International Securities Exchange (ISE) and IndexIQ have announced a broad partnership to develop and launch a range of exchange-traded products (ETPs) linked to physical commodities. While ISE is perhaps best known as a US options exchange, the company has an established index business and recently has manoeuvred itself deeper into the fast-growing ETP industry. The link-up with IndexIQ, a niche provider of alternative ETFs, looks well suited as both companies have a demonstrated pedigree in creating innovative products.


S&P Dow Jones rolls out Shariah versions of Goldman-conceived GIVI indices

Feb 7th, 2013 | By
S&P Dow Jones rolls out Shariah versions of Goldman-conceived GIVI indices

S&P Dow Jones Indices has announced the launch of S&P GIVI Shariah Indices, the first Shariah-compliant indices combining low volatility and an alternative weighting scheme that weight’s a stock by its calculated intrinsic value, rather than by market capitalisation. The S&P GIVI is constructed from the S&P Global BMI universe, a comprehensive, rules-based global index covering some 10,000 companies in 46 countries.


Vanguard to introduce low-cost international aggregate bond ETF

Feb 7th, 2013 | By
Vanguard adds developed APAC and emerging markets ESG ETFs

Vanguard has revealed plans to introduce the Vanguard Total International Bond Index ETF, a new fixed income exchange-traded fund (ETF) offering exposure to international bond markets. The ETF is scheduled to make its debut before the end of the second quarter. Bill McNabb, Vanguard CEO, said: “International bonds can serve as an important diversifier, especially for US investors who currently have modest exposure to the asset class.”


January “strongest on record” for global ETPs

Feb 6th, 2013 | By
Equities lead the way as global ETP industry gathers $12.9bn in March

Global asset flows for exchange-traded products (ETPs) recorded the best January on record with $40.2 billion inflows, according to the latest ETP Landscape Report from BlackRock. “After crossing the milestone figure of $2 trillion in total assets, the global ETP industry shows no signs of slowing down. The $40.2 billion in total net inflows this month was the strongest on record for the industry in January, surpassing the previous record last year of $33.5 billion,” said Dodd Kittsley, Global Head of ETP Research at BlackRock.


FTSE launches smart beta cyclical and defensive indices

Feb 6th, 2013 | By
FTSE launches smart beta cyclical and defensive indices

FTSE Group has announced the launch of the FTSE Cyclical and Defensive Index Series. The new smart beta indices reflect the performance of subsets of equities based on their sensitivity to the economic cycle. If replicated in investable format, the indices will allow investors to implement strategies according to their view on the economic cycle. The index series spans global, developed, emerging, regional and single country indices.


Punchy yield lures investors to Yorkville High Income MLP ETF

Feb 6th, 2013 | By
Solactive expands smart beta offering with two global infrastructure income indices

The Yorkville High Income MLP ETF (YMLP) has surpassed $100 million in assets under management, less than a year since it debuted on the NYSE Arca. The success of the fund is likely down to the fund’s punchy headline yield (30-day SEC yield as at year end was 8.33%), coupled with booming demand for the MLP asset class in general and growing interest in US energy infrastructure plays.


Russell Indexes introduces high-efficiency defensive indices

Feb 6th, 2013 | By
Rolf Agather, managing director of North America research, FTSE Russell

Russell Indexes has introduced a new series of smart beta, low-volatility indices that expand on the provider’s current defensive index range. The new Russell High Efficiency Defensive Indexes combine various economic and market risk factors, creating a “stability score”, to identify high-quality, low-volatility stocks. The indices, which are based on existing index universes, are the first low-volatility benchmarks to offer low targeted tracking error to widely-followed Russell benchmarks.


As risks ease, is now the time to deploy leveraged ETFs?

Feb 5th, 2013 | By
Quadruple leveraged ETFs to hit US shores

Risks continued to ease in the fourth quarter of 2012, with no signs of a reversal ahead, according to risk specialists Axioma. Melissa Brown, Senior Director of Applied Research at Axioma, said: “The decline in risk should give investors the opportunity to focus on achieving active returns.” With predicted risk considerably reduced, now could be the time for risk tolerant sophisticated investors to consider tactically adding a degree of leverage to their portfolios via leveraged exchange-traded funds (ETFs) offering geared exposure to various markets.


iShares unveils ETF toolkit for UK financial advisers

Feb 5th, 2013 | By
iShares unveils ETF toolkit for UK financial advisers

iShares, the exchange-traded funds (ETF) platform of BlackRock, has unveiled a comprehensive toolkit of materials on ETFs designed to meet the needs of UK financial advisers. The toolkit helps advisers assess ETFs and the role they can play in portfolios. It includes a detailed guide on issues such as calculating total cost, evaluating tax implications and what to look for when selecting an ETF; a guide to how ETFs can be used to construct a diversified core portfolio; as well as various sales aids.