Hortense Bioy, Director, Passive Strategies and Sustainability Research, Morningstar

Latest news

Morningstar predicts European ETFs to reach €2 trillion in assets by 2024

The European ETF industry is expected to experience robust growth in the coming years, with assets hitting €2 trillion by 2024, spurred by favourable regulatory changes, innovation, and an increasing acknowledgement of the benefits of low-cost investing. That’s according to analysis from investment research firm Morningstar. Hortense Bioy, Director, Passive Strategies and Sustainability Research, Morningstar, commented, “The well-entrenched trend of investor preference for low-cost investment solutions continues to support our positive outlook for the European ETF industry.”

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Latest news

Tobias Carlisle, Founder of Acquirers Funds

Acquirers Funds debuts with long-short deep value ETF

Acquirers Funds has unveiled its debut ETF – the Acquirers Fund (ZIG US) – on NYSE Arca, providing access to a long-short, deep value strategy that consists of long positions in undervalued, fundamentally strong equities and short positions in overvalued, financially weak companies. Tobias Carlisle, Founder of Acquirers Funds, commented, “Value spreads are widest since the run-up to the Great Depression and the Dot Com bubble…as a concentrated, long/short deep-value fund, ZIG is designed to maximally exploit this rare opportunity.”

MSCI Index Review Emerging Markets ETFs

MSCI EM and ACWI ETFs prep for major rebalance

Exchange-traded funds linked to the MSCI EM Index and MSCI ACWI are prepping for a major rebalance ahead of the implementation of MSCI’s semi-annual index review at the end of May, which will see Saudi Arabia and Argentina added and China’s weight increased. The two benchmarks act as underlying reference indices for numerous ETFs, accounting for many tens of billions of dollars of assets under management. Among the largest to be affected are the $57bn iShares Core MSCI Emerging Markets ETF (IEMG US) and the $10bn iShares MSCI ACWI ETF (ACWI US).

BlackRock adds US equity ETF to iShares ESG suite

BlackRock has added a new fund to its suite of environmental, social, and governance (ESG) ETFs. The iShares ESG MSCI USA Leaders ETF (SUSL US), which has listed on Nasdaq Exchange, comes to market with more than $800m in seed capital from Ilmarinen, Finland’s largest pension insurance company, which also collaborated with BlackRock in the development of the fund. “Funds like this help us mirror our values as a company while adding investment value in the process,” said Anna Hyrske, Head of Responsible Investing at Ilmarinen.

SoFi CEO Anthony Noto.

SoFi launches large-cap growth and gig economy ETFs

Online personal finance and investment company SoFi has launched two new ETFs in the US: SoFi 50 ETF (SFYF US), a large-cap growth fund; and SoFi Gig Economy ETF (GIGE US), an actively managed thematic ETF targeting the gig economy. “Our members are excited by high-growth and gig economy companies because these companies are in many cases part of their lives,” said SoFi CEO Anthony Noto.

Fixed Income

The strategic case for a long-term allocation to high yield

Matthew J Bartolini, Head of SPDR Americas Research

By Matthew J. Bartolini, Head of SPDR Americas Research, State Street Global Advisors.

Based on key systemic and persistent traits, high yield corporate bonds should be viewed as a strategic asset class within the portfolio construction process – even if the flow patterns within high yield ETFs indicate a more tactical investor mindset.

Strong quarter for bond ETFs as iShares pair become Europe’s first to surpass $10bn in assets

Brett Olson, head of iShares EMEA fixed income

The first quarter of 2019 saw the largest quarterly flow into bond ETFs on record – both in Europe and globally. The rising tide helped lift two iShares funds – iShares Core € Corp Bond UCITS ETF (IEAC) and iShares J.P. Morgan EM Local Govt Bond UCITS ETF (IEML) – above the $10 billion AUM mark, becoming the first bond ETFs in Europe to do so. Brett Olson, Head of Fixed Income iShares EMEA at BlackRock, said: “These milestones are evidence of a shift in mindset within an industry undergoing fundamental change, with more and more investors using ETFs at the core of their portfolios.”

Alternatives / Multi-Asset

IndexIQ: What’s behind the REIT rebound?

Salvatore Bruno, Chief Investment Officer at IndexIQ

By Salvatore J. Bruno, Chief Investment Officer, IndexIQ.

Real estate investment trusts (REITs) are off to a strong start in 2019, with the Morningstar US REIT Index up more than 14% year-to-date through 17 April 2019. On a trailing one-year basis, that number is a little over 17.5%. What’s behind this?

Accelerate plans Canadian ETF debut with alternative fund suite

Julian Klymochko, Founder and CEO of Accelerate

Accelerate Financial Technologies is planning its entrance into the Canadian ETF market with a suite of three actively managed alternative strategy funds which are due to be rolled out on Toronto Stock Exchange next week. Julian Klymochko, Founder and CEO of Accelerate, commented, “Accelerate’s Funds are the first of their kind – institutional-quality long-short equity hedge funds that trade as ETFs. We’re leveling the playing field by offering performance-oriented alternative strategies which had previously been reserved for institutions and the wealthy.”

Commodities

Gold: How we value the precious metal

Gold: How we value the precious metal

By Nitesh Shah, Director, Research at WisdomTree.

Gold is a unique asset class. Indeed, many investors even question whether it is an asset class. Is it a commodity, or a currency? What’s also interesting about gold is that even though it has been viewed as a form of investment for several millennia, there’s little consensus on how to actually value it.

‘Flight to safety’ leads to massive inflows for Invesco Physical Gold ETC

Chris Mellor, Head of EMEA ETF Equity and Commodity Product Management at Invesco

The Invesco Physical Gold ETC (SGLD LN) has experienced over $500 million in net inflows year-to-date amid increased demand for safe-haven assets driven by political and economic uncertainty. Chris Mellor, Head of EMEA ETF Equity and Commodity Product Management at Invesco, commented, “Gold is often used for portfolio diversification, due to its low correlation with equities, and it can also appeal to investors who want to take a more defensive stance during times of market stress.”

Equities

Amplify launches crowdfunding ETF

Christian Magoon, CEO of Amplify ETFs.

Amplify ETFs has launched a new fund in the US – the Amplify CrowdBureau Peer-to-Peer Lending & Crowdfunding ETF (LEND US) – which provides thematic exposure to the peer-to-peer (P2P) lending and equity crowdfunding ecosystem. “Businesses and consumers seeking alternative sources for capital are finding more opportunity in P2P lending and equity crowdfunding platforms,” said Christian Magoon, CEO of Amplify ETFs. “As the development of these platforms advances and more borrowers seek respite from the inefficiencies found within the traditional banking system, we’re excited to offer growth-oriented investors an attractive way to capitalize on this shift in behavior.”

Newcomer Timothy Plan launches two biblically responsible ETFs

Timothy Plan Biblical Values ETFs

Florida-based investment company Timothy Plan has become the latest entrant to the US ETF market with the launch of two biblically responsible funds on NYSE Arca. The Timothy Plan US Large Cap Core ETF (TPLC US) and Timothy Plan High Dividend Stock ETF (TPHD US) provide exposure to US large-caps and US high dividend stocks, respectively, while screening out firms that are not aligned with Christian principles.

HSBC launches Saudi Arabia ETF in Europe

HSBC launches Saudi Arabia ETF

HSBC Global Asset Management has launched a new ETF in Europe which provides exposure to the equity market of Saudi Arabia. The HSBC MSCI Saudi Arabia 20/35 Capped UCITS ETF (HMSA LN), listed on the London Stock Exchange, aims to meet increased investor demand for Saudi Arabian securities following MSCI’s decision to include the Kingdom into its emerging markets index from May 2019.

ETF and Index News

Trading ETFs: A way to manage risk?

Randy Frederick, Vice President of Trading and Derivatives, Charles Schwab.

By Randy Frederick, Vice President of Trading and Derivatives, Charles Schwab.

Have you ever spent hours identifying a potential trade, only to see the stock drop on unexpected company news, be it a sudden CEO departure, a product recall, or a public inquiry? For traders who have a hard time stomaching such uncertainty, ETFs may be able to help.

Why an ETF’s past performance can be misleading

Charles Schwab: Why an ETF’s past performance can be misleading

By Emily Doak, Managing Director of ETF Research for Charles Schwab Investment Advisory.

Even though funds are required by the US Securities and Exchange Commission (SEC) to include warnings that past performance is not a guarantee of future success, it’s difficult to ignore the performance information displayed prominently in charts and graphs, and, like sports fans, investors sometimes get caught up in the excitement swirling around a “winning” fund.

Fee cuts saved investors $5.5bn in 2018, finds Morningstar

Fee cuts saved investors $5.5bn in 2018, finds Morningstar

Investors saved approximately $5.5 billion during 2018 due to fee cuts in the US asset management industry, according to a report by investment research house Morningstar. Morningstar found that the asset-weighted average expense ratio of US open-end mutual funds and ETFs dropped by three basis points over the year, from 0.51% to 0.48%.