Archive for August 2016

Sanford C. Bernstein’s “worse than Marxism” comment fans active vs passive debate

Aug 31st, 2016 | By
Bernstein says passive investing is ‘worse for society than Marxism’

“Passive investing is worse than Marxism.” That’s according to analysts at research and brokerage firm Sanford C. Bernstein & Co in a recent paper that has sparked one of the hottest debates in the ongoing active-versus-passive conversation. Bernstein said that passive funds, such as ETFs, threaten the very structure of capitalism, arguing that “a supposedly capitalist economy where the only investment is passive is worse than either a centrally planned economy or an economy with active market led capital management.”

Nikko launches hedged and unhedged Treasury bond ETFs on Tokyo Stock Exchange

Aug 31st, 2016 | By
Deutsche launches currency-hedged Treasury bond ETF on Xetra

Nikko Asset Management has launched two new exchange-traded funds on the Tokyo Stock Exchange providing access to the US Treasury bond market. The Listed Index Fund US Bond ETF (Tokyo: 1486) and the Listed Index Fund US Bond (Currency Hedged) ETF (Tokyo: 1487) both track the S&P US Treasury Bond 7-10 Year Index, with the latter hedged version mitigating the impact of adverse fluctuations between the US dollar and yen through the use of one-month currency forwards.

ETFs largely unmoved by Jackson Hole speech

Aug 30th, 2016 | By
ETFs largely unmoved by Jackson Hole speech

The case for raising US interest rates has “strengthened”, the chairwoman of the Federal Reserve has said. Speaking at the Fed’s annual meeting at Jackson Hole, Wyoming, Janet Yellen was cautiously positive on the US economy and said “the case for an increase in the federal funds rate has strengthened in recent months”. Yellen’s comments have not come as much of a surprise, however, and ETFs were fairly quiet following the speech, with few major moves directly triggered by her comments. ETFs tracking the US utilities sector, such as SSGA’s $8 billion NYSE-listed Utilities Select Sector SPDR ETF (XLU), were perhaps the most obvious casualties of the speech, falling around 2.5%.

European ETF industry sees 22nd consecutive month of inflows

Aug 30th, 2016 | By
European investors favour developed equity ETFs during January, reports ETFGI

Assets in exchange-traded funds and exchange-traded products listed in Europe reached a new record high of $539bn at the end of July 2016, according to ETFGI. Net inflows of $9.4bn over the month represent the largest month of asset gathering during 2016 and mark the 22nd consecutive month of net inflows. Deborah Fuhr, managing partner at ETFGI, commented: “Investor confidence returned during July after the surprising result of June’s Brexit vote. The S&P 500 was up 3.7% in July. Developed markets outside the US gained 5.1% and emerging markets were up 4.8%.”

Canadian ETF/ETP assets trend higher with 21st consecutive month of inflows

Aug 29th, 2016 | By
Canadian ETF/ETP assets reach record high of US$81bn in July

The Canadian exchange-traded fund industry has enjoyed another month of inflows, with ETF and ETP assets reaching a new record of US$81bn at the end of July 2016, according to industry consultants ETFGI. Year to date (July month-end) assets under management are up 25.3%, with inflows of $180m seen in July. Mirae Horizons gathered the largest net inflows over the month, with $147m, followed by Vanguard with $131m and RBC Global AM with $21m.

First Trust launches two actively managed low volatility ETFs

Aug 26th, 2016 | By
First Trust launch two actively managed low volatility ETFs

First Trust has launched two new actively managed ETF on the NYSE that seek to capture upside price movements in rising markets and reduce downside risk when markets decline. Sub-advised by Horizon Investments, the funds use a proprietary quantitative rules-based investment process to manage volatility. Robbie Cannon, President & CEO at Horizon, said: “In this low interest rate environment, we are seeing all kinds of investors participating more and more in equity markets, even those who traditionally looked to fixed income markets…And while they want equity exposure, they naturally are looking for lower risk and lower volatility products.”

Emerging market debt ETFs back in focus as investors hunt yield

Aug 25th, 2016 | By
New Solactive EM consumer technology index to underlie KraneShares ETF

With negative interest rate policies being adopted by several central banks in the developed world, investors are beginning to turn their attention back to emerging market debt (EMD) in a hunt for yield. Already this year $5.7bn has flowed into EMEA-domiciled EMD ETFs. Antoine Lesné, Head of SPDR ETF Strategy & Research EMEA at SSGA, believes the asset class may offer an attractive return thanks to a healthy real yield differential, improving fundamentals and supportive monetary policies.

Charles Schwab launches ETF-based target date retirement funds

Aug 25th, 2016 | By
Charles Schwab launch series of ETF-based target date retirement funds

Charles Schwab Investment Management has unveiled a new series of target date mutual funds constructed using low-cost Schwab ETFs as underlying investments. The Schwab Target Index Funds include funds with target retirement dates between 2010 and 2060 in five-year increments “At a time when some asset managers are inundating investors with confusing, complex products, we’re experiencing greater demand for our straightforward, transparent products that deliver great value on their own or with professional management built in,” said Marie Chandoha, president and chief executive officer of Charles Schwab.

Principal rolls out thematic ETFs targeting healthcare innovators and millenials

Aug 23rd, 2016 | By
Principal launches US mega-cap low-vol ETF

Principal has launched two thematic ETFs targeting US healthcare innovators and global firms catering for the millennial generation. The Principal Healthcare Innovators Index ETF (Nasdaq: BTEC) and the Principal Millennials Index ETF (Nasdaq: GENY), both listed on Nasdaq, join an increasing number of thematic ETFs seeking to take advantage of secular demographic trends. Paul Kim, Managing Director of ETF Strategy for Principal Global Investors, said: “More and more, people want to invest in strategies they understand, whether that is a cause they support or their own lifestyle. It is our goal to provide investment options that connect with people while offering enhanced performance.”

First Asset launches actively managed IG corporate bond ETF on TSX

Aug 23rd, 2016 | By
Manulife Investments launches two new multi-factor ETFs

Canadian investment manager and exchange-traded fund issuer First Asset has launched the First Asset Investment Grade Bond ETF (Toronto: FIG), an actively managed ETF providing exposure to a high quality, diversified mix of investment grade corporate bonds from issuers in Canada, the US and Europe. The ETF, which has been listed on the Toronto Stock Exchange (TSX), has come about via the conversion of the Marret Investment Grade Bond Fund. Toronto-based Marret Asset Management, which specialises in credit fixed income portfolios, will continue to act as manager to the fund.