Archive for July 2015

SSGA urges investors to re-evaluate core bond ETF exposures

Jul 31st, 2015 | By
SSGA switches core US equity ETFs to in-house indices

A recent report from State Street Global Advisors (SSGA) argues that ETFs linked to traditional broad US bond indices, such as the widely followed Barclays US Aggregate Bond Index, may not be serving the needs of investors as efficiently as they once did. A reduction in diversity within these indices, coupled with expected changes to the dynamics of the fixed income market when rates start to rise, may result in these funds providing sub-optimal exposure to credit and duration risks. This could have ramifications for investors who use popular ETFs such as the iShares US Aggregate Bond UCITS ETF (SUAG) and the SPDR Barclays US Aggregate Bond UCITS ETF (USAG) as their core bond allocations.

O’Shares Investments launches smart beta ETF targeting quality income

Jul 30th, 2015 | By
Kevin O'Leary, Chairman of O'Shares ETF Investments

Boston-based investment manager O’Shares Investments has launched its debut ETF, the O’Shares FTSE US Quality Dividend ETF (OUSA), a multi-factor smart beta equity strategy targeting high-yielding, quality companies. Through a combination of factor exposures, the ETF aims to deliver enhanced returns, lower volatility and provide a sustainable yield. Designed as a core equity holding, the NYSE Arca-listed ETF is based on the FTSE US Qual / Vol / Yield Factor 5% Capped Index and marks the first in a series of ETFs O’Shares will be launching in partnership with index provider FTSE Russell.

FTSE Russell expands SRI family with new “ex coal” index series

Jul 30th, 2015 | By
FTSE Russell All-World ex Coal Index Series offers low-carbon index tracking options for ETFs

FTSE Russell, a leading global index provider, has announced the launch of the FTSE Russell All-World ex Coal Index Series, a new suite of indices tracking the performance of various broad equity market exposures while excluding firms operating in the coal mining industry and general miners with proved and probable coal reserves. The indices are designed for use in the creation of index-tracking funds, such as exchange-traded funds (ETFs) and as performance benchmarks. The indices help investors manage carbon exposure in their investments and reduce write-off or downward revaluation risks associated with so-called “stranded assets”.

S&P DJI rolls out suite of infrastructure bond indices

Jul 30th, 2015 | By
S&P Dow Jones announces aggressive expansion of fixed income index business

S&P Dow Jones Indices (S&P DJI), a leading index provider, has launched range of bond indices designed to track the performance of debt issued by global infrastructure companies. The indices track the fixed income component of S&P DJI’s infrastructure equity benchmarks, providing investors with a complete view of the performance of the debt and equity of global infrastructure companies. The indices are suitable as underlyings to index-linked investment products such as exchange-traded funds (ETFs).

Barclays and Elkhorn partner to develop ETFs

Jul 30th, 2015 | By
Barclays licenses Shiller Barclays CAPE index to Ossiam to underlie ETF

London-based bank Barclays and Illinois-based investment firm Elkhorn Capital Group have announced a strategic partnership which will allow them to collaborate on ETF products based on Barclays’ strategies. The partnership combines Barclays’ expertise in developing investment concepts with Elkhorn’s client insight and distribution network. “This allows us to offer our clients an expanded range of investment opportunities. We’re enhancing efficiency in product delivery, and matching that with innovation in investment content,” said Fabien Labouret, Global Head of EFS Investment Strategies at Barclays.

Consumer discretionary ETFs continue strong year as Starbucks and Amazon provide boost

Jul 29th, 2015 | By
Consumer Discretionary ETFs continue strong year as Amazon and Starbucks provide

ETFs tracking the consumer discretionary sector have performed well this year, with the LSE and Deutsche Börse-listed SPDR S&P Consumer Discretionary Select Sector UCITS ETF (SXLY) and NYSE-listed iShares Global Consumer Discretionary ETF (RXI) having appreciated by 9.3% and 8.9%, respectively, since January 1st, considerably above the essentially flat return of the S&P 500 over the same period. The sector was further boosted by strong earnings reports from consumer discretionary behemoths Amazon and Starbucks.

Robo-advisors set to disrupt UK wealth management industry

Jul 27th, 2015 | By
UK FinTech start-ups want to revolutionise ETF investing

Exchange-traded funds have long been heralded for their ability to provide investors with security market returns at a reasonable cost. The missing link for many investors has been a method to turn these building blocks into a complete portfolio solution which caters to their individual needs and to do so cheaply and easily. Financial technology companies, such as London-based ETFmatic, are working to fill this niche through technology-driven asset-allocation solutions and low-cost ETFs. These innovative young firms look set to disrupt the staid ways of the UK wealth management industry.

IndexIQ rolls out 50% currency-hedged ETF suite

Jul 27th, 2015 | By
Hedge fund ETF provider IndexIQ surpasses $1 billion in assets

IndexIQ, a leading developer of alternative ETFs, in partnership with MainStay Investments, has announced the launch of three 50% currency-hedged international equity ETFs. “Our research has shown that 50% hedged portfolios have the potential to capture up to 80% of the risk reduction benefits of a fully hedged approach, while potentially securing steadier performance, regardless of exchange rate fluctuations,” said Chief Executive Officer and Co-Founder of IndexIQ, Adam Patti.

Relaxation of foreign stock ownership restrictions likely to boost Vietnam ETFs

Jul 27th, 2015 | By
Vietnam ETFs up strongly YTD as government tackles bad debt

Exchange-traded funds linked to the Vietnamese equity market, such as Deutsche AWM’s db x-trackers FTSE Vietnam UCITS ETF (XFVT LN) and Van Eck’s Market Vectors Vietnam ETF (VNM), are likely to benefit from new regulations relaxing the restrictions of foreign stock ownership in Vietnam. The Vietnamese economy has been favoured lately by investors over other frontier markets due to consistent economic growth, favourable demographics, mass urbanization, strong foreign direct investment and ongoing reforms to state companies and the banking system. However, foreign ownership levels are already at their cap level for many major companies; a relaxation on these limits could provide significant increases in trading and liquidity levels of Vietnam-based ETFs.

FTSE Russell launches 50% hedged international indices

Jul 27th, 2015 | By
FTSE Russell launch 50% hedged international indices

FTSE Russell, a global index provider, has announced the launch of the FTSE 50% Hedged Index Series. The suite is designed for use in the creation of index-tracking funds, such as ETFs, and as a performance benchmark. Commenting on the launch, Ron Bundy, CEO Benchmarks North America, FTSE Russell, said: “In recent years currency exposure has become an increasingly important factor in global equity portfolios and our clients are asking for currency hedged benchmarks that go beyond the 100% hedge ratio available today. The FTSE 50% Hedged Index Series is designed to assist our clients in gaining a more complete understanding of the impact of currency in their international equity portfolios.”