Brazilian equity ETFs continue to bring investors positive returns despite forecasts of a significant economic upturn having thus far failed to materialize. GDP will grow just 0.5% in 2017, according to a central bank survey, while the IMF recently cut its growth outlook for Brazil to 0.2%. Despite the mediocre figures, the Brazilian Bovespa Index is up more than 7.3% year to date and over 60% in the past 12 months. Investors may gain access to Brazilian equities through an ETF wrapper from providers such as iShares, Amundi, HSBC, Lyxor and Deutsche Asset Management.
‘ Latin America ’
To celebrate the 15th anniversary of its flagship FTSE4Good Index Series, FTSE Russell has launched the FTSE4Good Emerging Markets Index and FTSE4Good Latin America Index, tracking the performance of firms meeting specific thresholds in relation to ESG practices. Mark Makepeace, CEO, FTSE Russell, commented: “The investment landscape has changed beyond recognition and sustainable investing, climate risk, the transition to a low carbon economy, and ESG integration are now a core focus for our clients”.
By Viktor Nossek, Director of Research, WisdomTree Europe: “It is often thought that “inefficient markets”—like Emerging Markets – are where there are great opportunities for active managers to add value. It would stand to reason that if there is a large opportunity for outperformance, there is also a large opportunity for underperformance. In other words, someone must be on the other side of the ‘inefficiencies.’”
Exchange-traded funds tracking Brazilian equities have soared in 2016 with the market on track to be the best performing asset category in 2016, despite ongoing political uncertainty in the country which has recently culminated in the impeachment of the country’s president Dilma Rousseff. The MSCI Brazil is up 32.7% year-to-date (1 September 2016) in local currency terms, contributing to significant gains for ETFs from iShares, Amundi, HSBC and db X-trackers which track the index.
Deutsche Asset & Wealth Management’s NYSE-listed db X-trackers Harvest CSI 300 China A-Shares ETF (ASHR) has been approved for distribution by the Comisión Clasificadora de Riesgo, Chile’s pensions regulator. From now on pension fund administrators in Chile, known as Administradoras de Fondos de Pensiones, can utilize the ETF as a registered investment instrument enabling plan participants to gain direct equity exposure to the China A-shares market. The ETF is the first such product to offer direct investment in China A-shares to be registered in Chile.
Deutsche Asset & Wealth Management (DeAWM), the asset manager behind the db X-trackers brand of exchange-traded funds, is to switch a further 12 of its European listed ETFs from indirect, synthetic, to direct, physical replication. The latest switch in ETF replication methodology mainly covers exposures to the equity markets of countries in the Asia-Pacific region, and represents approximately €2.5 billion in assets. It follows the successful conversion earlier this year of 18 db X-trackers ETFs from synthetic to physical replication, a move that made DeAWM one of Europe’s largest providers of physical ETFs.
S&P Dow Jones Indices has unveiled the S&P Colombia Select Index, an index tracking the performance of the largest and most liquid stocks domiciled in Colombia. The index uses a modified market capitalization weighting scheme, providing investors with a broad, yet replicable index covering the Colombian equity market. The index will soon be available to Colombian investors in investable format, following its licensing to Horizons ETFs’ Latin American operation to serve as the basis for an exchange-traded fund.
Amundi, a leading European provider of exchange-traded funds, has unveiled substantial fee reductions across its range of MSCI-linked emerging market ETFs. The price cuts – of more than 50% – come at a time when emerging market equities are enjoying renewed interest from investors. Valérie Baudson, Global Head of ETF and Indexing at Amundi, said: “We want to offer our clients the cheapest available ETFs for this asset class. This fee reduction again demonstrates our willingness to constantly meet investors’ needs with quality products at low cost.”
Lyxor Asset Management, Europe’s third largest provider of exchange-traded funds, has further expanded its already comprehensive emerging markets product line-up with the launch of three innovative ETFs linked to MSCI indices. Listed on the NYSE Euronext Paris, the ETFs offer a range of non-traditional emerging market exposures and include the Lyxor UCITS ETF MSCI EM Beyond BRIC (BBEM), the Lyxor UCITS ETF MSCI Select OECD Emerging Market GDP (LEMO), and the Lyxor UCITS ETF MSCI Mexico (MEXI).
Deutsche Asset & Wealth Management (DeAWM) has expanded its lineup of currency-hedged exchange-traded funds with the launch of three new db X-trackers ETFs on the NYSE Arca. Martin Kremenstein, Head of Passive Asset Management for DeAWM Americas, said: “In the current market environment, investors are looking for products to help them manage exposure to currency risk in their international investments. For this reason, we continue to expand our hedged equity platform to include countries and regions where the management of currency risk can strengthen a global equity portfolio.”