The Asia Pacific region, excluding Japan, saw record flows into its exchange-traded funds and exchange-traded products in the first two months of the year, according to data from consultancy ETFGI. Last month saw net inflows reach $2.42bn bringing the total figure for January and February to a record $6.41bn. Notable highlights were equity ETFs/ETPs, which gathered $1.28bn -the largest net inflows during February, followed by fixed income ETFs/ETPs at $507m, and commodity ETFs/ETPs not far behind with $474m. CSOP/China Southern was the most successful gatherer of new assets during the month with net ETF/ETP inflows of $852m, followed by Yuanta with $314m and HSBC/Hang Seng with $253m.

US companies with a long track record of consistently raising their dividends (dividend growers) provide a superior degree of downside protection compared to a broad market exposure, while also providing an income cushion, according to research from State Street Global Advisors, the asset manager behind the SPDR range of exchange-traded funds. The report shows that the SPDR S&P Dividend ETF (SDY), a portfolio of US stocks that have boosted their dividends for a minimum of 20 straight years, have historically experienced smaller drawdowns during market downturns compared to the performance of the S&P 500 Index.

China Post Global, the international asset management arm of the Chinese postal savings bank, has entered the European exchange-traded fund market with the acquisition of the Royal Bank of Scotland’s ETF range. The purchase marks the first time a Hong Kong asset manager has acquired a European UCITS ETF umbrella and its investment management team. Danny Dolan, Managing Director of China Post Global (UK), said: “Our aim is to differentiate ourselves through innovation. For example, while ETFs giving exposure to China and smart beta strategies already exist, no-one in Europe has yet combined the two.”

The Taiwan Stock Exchange has launched a new wholly-owned subsidiary, Taiwan Index Plus (TIP), which will run the exchange’s index businesses. TIP will include the development of new investable products and the maintenance of existing indices. It will also develop the exchange’s business by licensing current and future indices for the creation of investment products such as exchange-traded funds. Existing indices which will continue to be maintained by TIP include the benchmark TAIEX series, which tracks the market cap-weighted performance of all large cap companies listed on the Taiwan Stock Exchange, as well as a range of indices co-compiled with the likes of FTSE, Research Affiliates, and S&P Dow Jones Indices.

The cost of equity and bond mutual funds reached a low in 2015 following fee reductions over the past two decades, according to research from the Investment Company Institute (ICI), a US investment management industry association. The success of the exchange-traded funds, with their low fees, is a likely significant factor behind the decline. The data reflects the changes in asset-weighted average total expense ratios of equity, hybrid, bond and money market mutual funds since 1996. The study finds that all four categories exhibit a downward trajectory for expense ratios; equity funds decreased from 104bps in 1996 to 68bps in 2015; hybrid funds from 95bps to 77bps; bond funds from 84bps to 54bps; and money market funds from 52bps to 13bps.

Rebecca Hampson, associate editor at ETF Strategy, talks to Colin McInnes, managing partner & investment manager at Quartet Investment Managers. Quartet was founded in late 2009 by a group of experienced investment professionals to provide bespoke discretionary investment management services to investors both onshore and offshore. The firm believes in an active and passive approach to investment, and says that it doesn’t “shoehorn” its clients into predetermined solutions. This bespoke approach, combining active strategies and passive exchange-traded funds, makes it one of the only UK firms with this investment model.

Leading European index provider Stoxx has licensed the iStoxx MUTB Japan Quality 150 Index to Mitsubishi UFJ Kokusai Asset Management to underlie a new exchange-traded fund listed on the Tokyo Stock Exchange. The index captures the performance of quality companies with high profitability, low leverage and sustainable cash flows in Japan. It has been developed in collaboration with Japanese trust bank Mitsubishi UFJ. “The iStoxx MUTB Japan Quality 150 Index offers a unique opportunity to track the performance of leading Japanese companies in terms of overall quality and stability of their businesses,” said Matteo Andreetto, Chief Executive Officer of Stoxx.

Exchange traded product provider WisdomTree Europe has suggested investors position themselves defensively by hedging long equity positions, while also looking to UK Gilts, German Bunds and gold, in its asset allocation strategy released ahead of Britain’s referendum with the European Union, due to take place on 23 June 2016. The statement, which covers various asset classes including equities, fixed income, currencies and commodities, predicts that markets will become increasingly volatile before the referendum as speculation of a potential exit from the Union heightens political uncertainty.

Exchange-traded funds linked to Treasury Inflation-Protected Securities (TIPS) rallied following the recent Federal Reserve Open Market Committee meeting. Dovish tones from Fed officials suggest the central bank is now willing to tolerate higher inflation before tightening monetary policy more aggressively. The price of ten-year TIPS surged 1.7% following the release of details of the meeting, pushing the yield to a one-year low of 0.26%. The $16.2bn iShares TIPS Bond ETF (NYSE Arca: TIP), which tracks a range of inflation-protected US government bonds across the maturity spectrum, enjoyed its strongest weekly rally since March 2015.

More than 85% of active equity funds in Europe underperformed their benchmark over the last ten years, according to the Year End 2015 Europe S&P Indices Versus Active Funds (SPIVA) Scorecard. The results support the ongoing argument that passive funds, such as ETFs, offer better value and performance than their actively managed counterparts. The SPIVA scorecard, which is considered the de facto scorekeeper of the ongoing active versus passive debate, includes a breakdown of the performance of actively managed funds in a wide number of specific European countries, against their relevant S&P benchmarks.