Matthew Schiffman, principal for Distribution Insight, Broadridge Financial Solutions.

Latest news

Financial advisors’ ETF allocations expected to continue ramping up

Financial advisors are expected to continue ramping up their ETF allocations in 2020, according to research from Broadridge. In a survey, the data provider found that 83% of advisors had increased their ETF allocation over the past two years with nearly three-quarters saying they expected it to continue to grow in 2020, primarily at the expense of active mutual funds. Matthew Schiffman, Principal for Distribution Insight at Broadridge, said, “Advisors planning to allocate more assets to ETFs next year are most likely to pull away assets from actively managed funds, and it’s a shift that’s likely to become more pronounced over time”.

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Latest news

BlackRock launches multifactor style ETFs

BlackRock launches Russell 1000-based multifactor style ETFs

BlackRock has launched two new US equity factor ETFs on Cboe BZX Exchange: the iShares Factors US Growth Style ETF (STLG US) and the iShares Factors US Value Style ETF (STLV US). The funds, which are constructed using the Russell 1000 universe of US large-cap stocks, provide multifactor exposure to stocks that have been pre-screened for either growth or value style characteristics.

Vanguard has listed 14 new accumulating share classes on Borsa Italiana.

Vanguard adds 14 accumulating share classes on Borsa Italiana

Vanguard has added 14 new accumulating share classes for various fixed income and equity ETFs on Borsa Italiana. The share classes are tradeable in euros and aimed at investors who wish to reinvest (or capitalize) income within the fund. The underlying funds range in size from $280m to $27bn.

Tabula launches physical cash bond ETF mirroring iTraxx Europe CDS benchmark

Tabula launches physical cash bond ETF mirroring iTraxx Europe CDS benchmark

Tabula Investment Management has unveiled its first cash bond ETF, the Tabula iTraxx Europe IG Bond UCITS ETF, offering physical corporate bond exposure to an index mirroring the important iTraxx Europe CDS benchmark. The fund, which has listed on the LSE, is likely to appeal to investors seeking a well-diversified, pure-play position in investment-grade, genuinely European credit. It may also provide an effective investment vehicle by which to facilitate basis trades between bonds and CDS. Michael John Lytle, CEO of Tabula, said he was “very excited at the level of innovation” offered by the ETF.

WisdomTree reduces fee on ICBCCS S&P China 500 ETF

WisdomTree reduces fee on ICBCCS-managed S&P China 500 ETF

WisdomTree has reduced the fee charged on its European-listed ICBCCS WisdomTree S&P China 500 UCITS ETF (CHIN LN). The total expense ratio has been cut by 20 basis points, from 75bps to 55bps, effective from the start of the year. The ETF, which is physically replicated and managed by Hong Kong-based ICBC Credit Suisse Asset Management, tracks the S&P China 500 Index, offering broad coverage of all China equity share classes – including A-Shares and offshore listings.

Fixed Income

Pacific Global unveils actively managed senior loan ETF

Pacific Global unveils actively managed senior loan ETF

Pacific Global Asset Management has unveiled its newest ETF strategy with the introduction of the Pacific Global Senior Loan ETF (FLRT US) on NYSE Arca. The actively managed fund seeks to generate high current income and preserve capital by investing in a portfolio of senior floating-rate loans. Anthony J. Dufault, MD of Pacific Global ETFs, said, “We believe that passive management is an inefficient strategy for floating-rate loan funds. Our experienced team of fixed income professionals seeks to add value by carefully selecting highly liquid, floating-rate loans of non-investment-grade companies.”

MSCI launches ESG and factor fixed income indices

Peter Zangari, Global Head of Research and Product Development at MSCI.

MSCI has introduced its first sole-branded fixed income indices with the launch of two suites providing factor-based and ESG-screened exposures. The MSCI Fixed Income Factor and MSCI Fixed Income ESG indices are built around a universe of investment-grade, US dollar-denominated corporate bonds and derived from the parent MSCI USD Investment Grade Corporate Bond Index – also a newly created index. Peter Zangari, Global Head of Research and Product Development at MSCI, said, “Building on our four decades of experience, this next generation of indices brings increased clarity to the traditionally opaque fixed income asset class to support ESG and factor-based fixed income strategies.”

Alternatives / Multi-Asset

IndexIQ 2020 macro outlook: Three actionable ideas for the year ahead

Sal Bruno, Chief Investment Officer at IndexIQ.

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

After what had been a tumultuous 2019, the end of the year is bringing significant progress on a number of fronts that have had investors on edge for months.

iM Global Partner and Dynamic Beta Investments launch long/short hedge fund ETF

Andrew D. Beer, Managing Partner of Dynamic Beta Investments

Paris-headquartered investment platform iM Global Partner and New York-based investment manager Dynamic Beta Investments have partnered on their second ETF: the iM DBi Hedge Strategy ETF (DBEH US). The fund is actively managed and provides exposure to a long/short global equity strategy based on the asset allocations of leading hedge funds. Andrew Beer, Managing Member of Dynamic Beta Investments, said, “The iM DBi Hedge Strategy ETF exemplifies Dynamic Beta’s mission: provide investors with innovative alternative investment solutions with low fees and daily liquidity and minimize single manager risk.”

Commodities

Strongest annual performance for the S&P GSCI since 2007

Strongest annual performance for the S&P GSCI since 2007

By Fiona Boal, Head of Commodities and Real Assets, S&P Dow Jones Indices.

The S&P GSCI ended 2019 up 17.6%. This was the S&P GSCI’s 10th-strongest performance since 1990 and its best annual return since the heights of the so-called commodity supercycle in 2007.

WisdomTree introduces CHF-hedging for roll-enhanced commodity ETF

WisdomTree introduces CHF-hedging for roll-enhanced commodity ETF

WisdomTree has introduced a new currency-hedged share class for the WisdomTree Enhanced Commodity UCITS ETF on SIX Swiss Exchange. The share class, which trades under the ticker COMS SW, mitigates currency risk between the underlying US dollar-denominated commodity futures contracts and the Swiss franc.

Equities

Purpose Investments to launch medical cannabis ETF in Europe

Purpose Investments to launch medical cannabis ETF in Europe

Purpose Investments is set to launch its first ETF in Europe, the Medical Cannabis and Wellness UCITS ETF (CBSX GR) on Xetra. The fund, which is being brought to market in collaboration with white-label ETF provider HANetf, will be the first UCITS ETF to deliver targeted exposure to the rapidly expanding medical cannabis industry. Som Seif, CEO of Purpose Investments, said, “We believe that the cannabis sector is still in the infancy stages of a multi-year growth phase and that there is ample opportunity for innovation and new discoveries.”

Infusive debuts with global consumer champions ETF

Infusive debuts with global consumer champions ETF

New York-based Infusive Asset Management has unveiled its first ETF – the Infusive Compounding Global Equities ETF (JOYY US). The fund is linked to the MSCI Infusive Global Consumer Champions Index which provides exposure to high-quality companies from consumption-related industries globally. It has listed on NYSE Arca and comes with an expense ratio of 0.50%.

The rising importance of dividends when earnings slow

Kieran Kirwan, Director, Investment Strategy at ProShares.

By Kieran Kirwan, Director, Investment Strategy at ProShares.

Through November 15, 2019, 92% of the S&P 500 constituents have announced earnings, and investors have been paying close attention. Most companies that have reported thus far have exceeded estimates, which had in many instances been guided lower. On the surface, this is, of course, positive news. But when looking for year-over-year growth, a different story begins to emerge.

ETF and Index News

European ETF assets break through $1trn

European ETF assets break through $1trn AUM

Assets under management in ETFs (and ETPs) listed in Europe have surpassed $1 trillion as of the end of December 2019, according to data from ETF research firm ETFGI. Total AUM rose 4.6% during the month, from $982.1 billion to $1.027trn, driven by a combination of strong net inflows and healthy market performance. Fixed income ETFs attracted the lion’s share of flows in 2019 with $61.1bn, followed by equity ETFs with $51.7bn and commodity ETFs with $8.7bn.

Horizons lowers total cost of Nasdaq 100 ETF

Horizons lowers total cost of Nasdaq 100 ETF

Horizons ETFs Canada has lowered the total cost of ownership of the Horizons Nasdaq 100 Index ETF (HXQ CN) by switching the fund’s replication method from synthetic to direct physical replication. Following the change, the fund is now the cheapest ETF in the country to provide exposure to the pre-eminent large-cap growth index.

HSBC GAM announces ETF push in 2020

HSBC GAM announces “ETF push” in 2020

HSBC Global Asset Management has announced plans to expand its ETF business in 2020. The firm, which currently manages $50 billion in passive strategies, including c. $8.5bn in ETFs, has outlined its intentions to launch ESG, fixed income and precious metals products in the coming year and to grow its team of in-house ETF professionals. The move aims to breathe new life into HSBC’s asset management business which has lagged rivals in recent years.