By Nick Leung, Research Analyst at WisdomTree.
Turnover in WisdomTree’s range of leveraged oil exchange-traded funds hit a record high of $10bn in 2016 as investors moved to exploit the dramatic recovery in the energy price. As with oil, the majority of trades in gold were focused on the leveraged long side, with $474m invested in leveraged longs versus $187m in short positions. The assets may see further interest on the leveraged long side in 2017 if recent price momentum is maintained.

By Raphael Marechal, Senior Portfolio Manager, Nikko Asset Management.
2016 was a strong year for emerging market (EM) fixed income, with markets reflecting an inflection point in EM fundamentals, after several years of deterioration. Overall in 2016, external debt was the best performing segment in EM (up 10.15%), followed by local debt (up 9.94%) and corporate debt (up 9.65%). The year started with concerns about China and its ability to avoid a hard landing. The global search for yield also continued throughout the year, amid the still expansionary G-3 monetary policy regimes.

S&P Dow Jones Indices has launched the S&P Global Revenue Exposure Indices, measuring the performance of companies dominating revenue streams from targeted regions internationally. The indices are derived from leading financial benchmarks, including the S&P 500, S&P/TSX 60, S&P/TOPIX 150 and the S&P Europe 350. Philip Murphy, Vice President, Product Management, at S&P Dow Jones Indices, commented: “The S&P Global Revenue Exposure Indices are an opportunity for targeted equity exposure, as they represent the markets that hold the greatest influence to a company’s top line.”

China’s progress toward full inclusion of its stocks in global benchmarks could be halted if the world’s second-largest economy cracks down further on people moving money out of the country, index provider MSCI Inc’s top executive said on Monday.

China Exchanges Services Company has unveiled the CES China Private Elite Index (CES P Elite), designed to capture the performance of Mainland China’s 30 largest private enterprises listed on the Hong Kong Stock Exchange or on the NYSE, NASDAQ or AMEX stock exchanges. The universe of the CES P Elite tends towards broad market coverage and industry diversification, factors that are valued by global investors. The index has been designed to underlie future investment products including ETFs.

Solactive has released two new fixed-income benchmarks designed to track the performance of the global US dollar- and euro-denominated high yield bond markets. The Solactive USD High Yield Corporate Index and the Solactive Euro HY Corporate Index may serve as reference standards to compare and evaluate portfolio results, a starting universe on which to build investment strategies or smart-beta indices, or as a basis for investment products such as ETFs.

Virtus ETF Solutions, in partnership with Cumberland Advisors, has introduced the Virtus Cumberland Municipal Bond ETF (NYSE: CUMB), an actively managed ETF investing in a basket of municipal bonds. The fund will invest in local, state and federal bonds with an emphasis on shorter-term and longer-term bonds while maintaining the flexibility to to favour shorter maturities should interest rates rise.

Invesco PowerShares has launched a new US Treasuries ETF designed to act as a solution for institutional clients who need to post collateral including that needed to meet margin requirements. The PowerShares Treasury Collateral Portfolio (NYSE: CLTL) tracks the performance of fixed and floating rate US Treasury securities with a remaining maturity between one month and one year. Dan Draper, Global Head of PowerShares by Invesco, commented: “Money market reform will have an impact on US investors going forward, [this] ETF will help ease certain challenges on deck for our clients.”

By Viktor Nossek, Director of Research at WisdomTree.
Given the near term economic outlook is solidifying in the US, stabilising in the emerging markets and moderating in Europe, we believe that European equity markets should prove resilient to the looming European political uncertainty in 2017 that could redefine the European economic and financial landscape for decades. For now, the banks’ efforts to fast-track restructuring and recapitalisation ahead of potential political fallout in 2017 are driving increased European equities strength.

MSCI has renamed its South East Asia Index offerings, which will subsequently be known as the MSCI ASEAN Indices. In addition to renaming 234 standard indices, MSCI has added new offerings designed to represent a range of opportunity sets across the developed, emerging and frontier markets in the ASEAN region. Alvin Lee, ASEAN country head for MSCI’s Asia Pacific region, commented: “The rebranding of our Southeast Asia index offerings demonstrates MSCI’s commitment to the ASEAN region and to evolving with the development of its capital markets.”