Xact has launched the XACT Swedish Small Cap UCITS ETF (Nasdaq Stockholm: XACTSMAC), the first exchange-traded fund to track the Swedish small cap equities market.

MSCI has announced that its flagship gauge of global equity markets, the MSCI ACWI Index, reached a record level of 866.4 on Wednesday 23 February 2017, the highest in its 23-year history. The strong performance, rising 5.9% since the start of the year, has been reflected in a wide range of ETFs tracking the index.

From approximately half way through 2016, low volatility ETFs started to display higher volatility compared to similar mainstream equity indices. Despite the funds not delivering on their stated objectives, global research firm Cerulli Associates has advised investors to be patient, noting that smart beta strategies are designed as long-term holdings. Barbara Wall, Europe Managing Director at Cerulli, said: “Smart beta will not work every time. But if it can work at least some of the time, it can help enhance returns.”

The premium that institutional investors pay to trade emerging markets stocks rather than their peers in developed countries narrowed markedly in 2016, a Greenwich Associates survey showed on Wednesday. The rising popularity of exchange-traded funds (ETFs) could be one reason for the narrowing premiums, Greenwich said.

FlexShares has reported a 55% growth in ETF assets during 2016, significantly above the 20% rate of growth recorded across the entire US ETF industry, according to Morningstar figures. Shundrawn Thomas, Head of FlexShares ETFs at Northern Trust, notes demand for ETFs are being driven by three key trends: regulatory change, keen interest from institutional investors and the increasing use of ETFs within multi-asset class strategies.

ETFs tracking the European banking sector have made consistent gains since June 2016, as shown by the Lyxor Stoxx Europe 600 Banks UCITS ETF rising 46.7% since its multi-year low in early July 2016. The turnaround followed a one year period of misery where the industry lost approximately 50% of its market capitalization. While an improving European economy and the expectation of higher interest rates has served to buoy share prices, the sector faces significant risks going forward.

Data from Thomson Reuters Lipper shows that the best-selling ETF in Europe during January was the Source Bloomberg Commodity UCITS ETF A USD (LON: CMOD), which gathered around €800m. The strong inflows into the Source ETF helped mark a turnaround for Europe-listed commodity ETFs, which gathered approximately €600m total net inflows, as investors sought to diversify their portfolios.

ETFs are gaining increasing support in Asia, attracting new institutional users and assets, according to a new report by Greenwich Associates, a provider of market intelligence and advisory services to the financial services industry. Andrew McCollum, Greenwich Associates Managing Director, said: “Fueling this growth in Asia—and indeed around the world—is institutions’ continued adoption of ETFs for an expanding list of functions within their portfolios.”

Institutional investors are increasingly turning to ETFs to gain access to a broad range of asset classes and investment objectives, especially during high market volatility, according to Tradeweb. The OTC Platform provider has reported elevated ETF trading volumes between November 2016 and January 2017 which it believes is reflective of a growing adoption of ETFs as vehicles for tactical positioning as well as to protect portfolios by diversifying economic, currency and risk exposures during periods of uncertainty.

New survey data for Blackrock Canada shows that Millennials and Gen X investors are leading the charge for future ETF adoption. The “BlackRock ETF Pulse Survey” revealed that 85% of Millennials and 76% of Gen Xers are likely to allocate new investments to ETFs, compared to 44% for their older counterparts, citing the ability to diversify, reduce risk and decrease costs as the top reasons for investing in ETFs.