Archive for June 2016

Investors should look to dividend-paying smart beta ETFs

Jun 30th, 2016 | By
SSgA expands range of high yield 'Dividend Aristocrats' SPDR ETFs

With rates anticipated to stay low for a while, investors should look to dividend paying exchange-traded funds with a smart beta tilt, say market experts. Speaking at the ETF Strategy Income and Yield briefing yesterday, industry commentators said that dividend yield is king. However, investors should be aware of so-called ‘dividend traps’ whereby the highest paying stocks are the highest risk. Caroline Baron, head of Invesco PowerShares ETF Distribution UK, said that investors should “focus on yield because this is where we are now, but it should have some kind of tilt.”

FTSE Russell to launch new index series with Namibian Exchange

Jun 30th, 2016 | By
S&P Dow Jones extends Africa-focused index offering

Global index provider FTSE Russell has developed a new index series with the Namibian Stock Exchange. Due to launch tomorrow, there are 20 indexes on offer, which will be available as underlyings for index products, including exchange-traded funds. The Namibian-focused indexes have been calculated by FTSE Russell since 2002, but were previously part of the FTSE JSE Index Series. They have now been separated from this and will have their own Ground Rules. ‘Ground Rules’ describes the underlying universe from which constituents are chosen, their eligibility criteria and the frequency at which the composition of the indexes are reviewed.

Gold ETPs continue to present opportunities

Jun 28th, 2016 | By
ETF Securities reduces management fee on Swiss gold ETP

Following Thursday’s Brexit result the price of gold rallied, rising 6.6% on Friday to hit $1,337 an ounce. But while prices may look saturated there could still be upside and ETPs could offer investors another way to access the precious metal. In the wake of the announcement that the UK had voted to leave the European Union, the S&P 500 and FTSE 100 fell 5.3% and 5.68%, respectively. However, the S&P GSCI Gold Total Return gained 4.9% between 2th – 27th June- its best performance since August 2011 – and the Bloomberg Gold Sub index Total Return rose 5%.

European ETF assets remain highly concentrated in top 10 funds

Jun 28th, 2016 | By
ETF intraday prices and trading show insight into market conditions

The last four months have seen strong asset growth in European-based ETFs, but the majority of investor assets are still highly concentrated in just a handful of funds, according to new data. Total European ETF assets hit €454.6bn at the end of May across 2,000 exchange-traded instruments, but according to data from Thomson Reuters Lipper, the 10 largest ETFs in Europe account for just over 17% (€77.8bn) of the total market. Only 96 of the 2,118 exchange-traded instruments contain more than €1bn in assets. The largest funds are all in mainstream equity markets, bar one.

Top 10 ETFs in May see massive inflows into bonds

Jun 28th, 2016 | By
PowerShares Source rolls out new euro bond ETF in partnership with PIMCO

Euro corporate bonds were the best-selling asset class in May as investors were willing to take more risk, according to new data from Thomson Reuters Lipper. Over half of the top 10 best-selling European ETFs last month were within the fixed income category as bonds saw more than €2bn of inflows, while equities suffered losses of the same amount. Despite bonds being a firm favourite in May, equities still make up the bulk of total European investor allocation at 67% of total assets under management. We look at the top 10 most popular ETFs, which gathered € in total.

UK gilt ETFs enjoy post-Brexit surge as yields collapse

Jun 28th, 2016 | By
BOE announces dovish rate hike

In the aftermath of the British people’s decision to secede from the European Union the UK has lost its AAA rating from Standard & Poor’s, while Moody’s has downgraded its credit outlook from stable to negative. The change is reflective of the heightened uncertainty surrounding the UK’s political and economic futures. Despite the downgrade, yields on UK gilts were pushed lower following the vote as investors flocked into safe-haven assets. The iShares Core UK Gilt UCITS ETF (IGLT), which tracks a mix of shorter and longer dated UK government debt, has risen more than 4.4% since 23 June.

Surprise Brexit vote impacts equity and currency ETFs

Jun 28th, 2016 | By
Traders voice concerns over growth of passive investing

The result of Thursday’s vote to leave the European Union caught traders off-guard, resulting in a massive sell-off of assets on Friday 24 June 2016. As it became clear that Britain would be leaving the economic bloc it has been part of since 1975, exchange-traded funds tracking major UK, US and European indices suffered significant falls in value, while currency exchange-traded products were also hit. ETFs such as the iShares Core FTSE 100 UCITS ETF (LSE: ISF) and the Vanguard FTSE 100 UCITS ETF (LSE: VUKE) dropped 6.4% as the UK market opened on Friday.

Are ETFs a better investment over the shorter or longer term?

Jun 27th, 2016 | By

Exchange traded funds are often touted by providers as being an ideal vehicle for short-term decisions and tactical investors due to their intraday liquidity, but a new study argues that ETFs are best held over the longer term. The June 2016 study from Vanguard, called “The Case for Low-Cost Index-Fund Investing”, said that time horizon is an especially important factor for investors who want to pay less in fees, see higher returns and favourably compare performance of passive versus active funds.

PowerShares cross-lists smart beta EM ETF in Germany

Jun 27th, 2016 | By
Bryon Lake, international head of ETFs, JP Morgan Asset Management.

ETF provider InvescoPowerShares has cross-listed its PowerShares FTSE Emerging Markets High Dividend Low Volatility UCITS ETF (EMHD) to Xetra and Börse Frankfurt. First listed on the London Stock Exchange in May this year, the smart beta ETF tracks stocks from emerging markets with high dividend yields and low price volatility. It trades in US dollars and tracks the performance of the FTSE Emerging High Dividend Low Volatility Net Total Return Index. Bryon Lake, Head of Invesco PowerShares – EMEA, said: “By combining the high dividend and low volatility screens, we are seeking to present the best of both factors for emerging markets equity exposure.”

Afkar Capital launches UAE’s first UCITS ETF

Jun 27th, 2016 | By
Dubai Financial Market unveils regional ETF trading platform

Abu Dhabi-based asset manager Afkar Capital has launched the first UCITS-compliant exchange-traded fund to list in the Middle East. The Afkar S&P UAE UCITS ETF (UAETF) will list on local stock exchange Dubai Financial Market on Wednesday. The fund tracks the S&P UAE BMI Liquid 20/35 Capped Index, a reference for the largest stocks by market capitalization in the UAE. His Excellency Essa Kazim, Chairman of Dubai Financial Market, said in a statement: “Dubai Financial Market is delighted to welcome this significant step from Afkar Capital, in line with our strategy to provide investors with innovative and diversified investment products.