The global bond ETF industry achieved its best quarter on record with $44.5 billion of inflows during Q1 2017, according to analysis by BlackRock. Stephen Cohen, head of fixed income beta at BlackRock, highlighted some of the global trends seen in the space since the start of the year, including strong appetite for investment grade credit, emerging market debt and Treasury bond funds.
‘ Global ’
ETFs and ETPs listed globally experienced record net inflows of $66.3 billion during March, according to research from ETF industry consultant ETFGI. The strong net gatherings marked the 38th consecutive month of positive net inflows within the space.
Toroso Investments and white label ETF platform Exchange Traded Concepts, have launched the ETF Industry Exposure & Financial Services ETF (NYSE: TETF), providing access to companies driving growth in the ETF industry. Mike Venuto, CIO of Toroso Investments, commented: “[The ETF] is aimed toward capturing not only the established leaders in each area, but also those firms that might be new to the space but are bringing exciting approaches that could resonate with investors and drive further growth of the industry itself.”
Two new smart beta equity ETFs from iShares, the iShares Edge MSCI World Minimum Volatility UCITS ETF and the iShares Edge MSCI World Multifactor UCITS ETF, have been made available on Deutsche Börse’s Xetra and Frankfurt exchanges. Both ETFs minimise the exchange rate risk between the US dollar and the euro by adopting a monthly currency hedge.
Canada-based Mackenzie Investments has received final approval from securities regulators to launch a fixed income ETF on Aequitas NEO Exchange. The Mackenzie Global High Yield Fixed Income ETF (MHYB) will be the fifth fund in Mackenzie Investment’s series of active fixed income ETFs and is expected to begin trading on 26 April 2017.
By Jamil Baz, managing director and global head of client analytics, PIMCO.
Ask an investor if most active bond funds outperform their passive counterparts and the response is likely to be “no”. After all, if one investor beats the market, another must lag it. Active strategies incur higher fees, so the majority should underperform their lower-fee passive counterparts. Our research suggests otherwise – at least for bonds, if not for stocks.
ETFs listed in Europe experienced net inflows in March of €9.8 billion, leading to a record-breaking quarterly result of over €30bn for Q1 2017, according to Marlène Hassine Konqui, head of ETF Research at Lyxor, Europe’s third largest provider of ETFs.
European investors have significantly increased their commodity exposure, with $1.3 billion going into broad commodity ETFs in the first quarter of 2017, according to analysis from European ETF provider Source.
With over 900 ETFs based on its indexes, MSCI is one of the most important index providers in the ETF world. The firm calculates over 180,000 indexes daily with over $10 trillion in assets benchmarked to those indexes. ETF Strategy sat down with Hitendra Varsani, who spent 11 years at Morgan Stanley prior to joining MSCI as executive director of factor strategies.
According to a note from Bank of America Merrill Lynch, flows into robotic ETFs and mutual funds have grown significantly over the last year, swelling assets from around $5.1 billion to $8.9bn.