In a new report, Thomson Reuters Lipper has identified the ten least popular asset classes in Europe and the handful of ETFs within each that are at risk of closing down. The funds range from exotic exposures such as Kuwait equities to broader ETFs such as emerging market corporate bonds. Detlef Glow, Head of EMEA research at Lipper, said: “Some funds in the European ETF market are quite low in assets and may face the risk of being closed in the near future. They are obviously lacking investor interest and might therefore not be profitable for the respective fund promoters.”

New York based Global X Funds has announced that, as of 6 December 2016, the Global X FTSE Portugal 20 ETF (NYSE: PGAL) will track the MSCI All Portugal Plus 25/50 Index. Compared with the fund’s previous index, the FTSE Portugal 20 Index, the new index will track 21 constituents instead of 20. The fund will have broadly similar sector exposures under the new index but will increase the weight of the top two constituents, Galp Energia, to 23.2%; and EDP Energias De Portugal, to 21.5%.

Asia Index, a joint-venture between S&P Dow Jones and BSE, India’s first stock exchange, has launched the S&P BSE SENSEX 50 Index, tracking the 50 largest and liquid companies listed at BSE. The index may serve as the underlying for future investment products including ETFs. Alka Banerjee, CEO, Asia Index, commented: “With the launch of the S&P BSE SENSEX 50 Index, we aim to provide a more effective tool for institutional and retail investors’ growing needs.”

Shrugging off a weak start in the first two weeks of 2016, exchange-traded funds tracking the natural resources sector have enjoyed significant growth throughout the rest of the year – the VanEck Vectors Natural Resources ETF (NYSE: HAP) is up 22.1% year-to-date, as of 30 November 2016. Despite the strong performance, VanEck argues that energy and mining stocks are only in the early stages of a cyclical rebound, setting the sector up for further growth in 2017.

London-based ETF Securities has announced that investors pulled $274m from their gold ETPs and $126m from their long oil ETPs during the week ended 2 December 2016, marking the largest outflows from these funds since July 2015 and August 2010 respectively. Nitesh Shah, Director, Commodities Strategist, ETF Securities has attributed the outflow from oil ETPs to savvy investors taking profits following the landmark deal reached by OPEC members, while investors shifted away from gold amid stronger signals the Federal Reserve would increase interest rates during their December meeting.

In a landmark referendum, Italy has rejected constitutional reform that would have shifted power from the Senate to the Lower House. The result has effectively ended the leadership of Prime Minister Matteo Renzi, who has already tendered his resignation. Although ETFs tracking Italian equities have remained relatively calm, the outcome is expected to weigh heavily on stocks as the country tries to deal with a looming crisis in its financial sector. Volatility is also expected to remain high across eurozone equity ETFs as investors attempt to discern the extent to which the result will impact the broader monetary union.

By Nizam Hamid, Head of Europe Sales, WisdomTree.
“In a nutshell, we believe a Trump victory – especially coupled with a Republican Congress – is very good for US mid-cap, US small-cap and overseas markets, such as Japan, that are sensitive to a strong USD/ weak domestic currency. Shortly after the US election results, the market began to immediately discount expected policy changes next year that will likely lead to a pro-growth economic agenda. That agenda includes cuts in individual and corporate tax rates, increased spending on defence and infrastructure, and a rollback on regulations.”

UBS has launched a suite of ETFs seeking to mitigate inflation risk by tracking US Treasury Inflation-Protected Securities (TIPS). The ETFs provide exposure to either shorter term (with remaining maturities between one and ten years) or longer term (greater than ten years) TIPS, while trading in British pounds. Currency-hedged versions of the shorter term TIPS ETF relative to the British pound, Swiss franc or euro have also been launched. Andrew Walsh, Head of UBS ETF Sales UK & Ireland, commented: “With this innovative suite of ETFs our clients our able to protect long-term purchasing power and gain access to an asset class that compounds the real rate of return.”

A growing banking dilemma in Italy, where non-performing loans currently make up in excess of $400bn worth of assets, is weighing heavily on ETFs tracking European financial stocks – Italian banks comprise roughly 9% of the European Union’s banking sector. Persistently low interest rates, increasing anti-EU sentiment within the country, and a national referendum on 4 December which may see current Prime Minister Matteo Renzi resign, are all adding up to a heightened risk profile for the country’s financial sector.

Record-breaking sales on Black Friday have added a further boost to retail-focused exchange traded funds across Europe and the US. US shoppers on mobile phones bought $3.05bn on Black Friday, adding to sales of almost $2bn on Thanksgiving day, indicating consumer sentiment in the States is still robust after a divisive and, for some, unexpected presidential result. ETFs from iShares and SPDR ETFs which track the S&P 500 Consumer Discretionary Index have risen by 3.7% since 14 November.