ETFs tracking the German DAX Index, such as the the db X-trackers DAX UCITS ETF (XETRA: XDAX), slid 0.7% between 13 and 17 January as it became clearer that the UK is prepared to leave the single market as part of its Brexit deal, but it is still up 21.8% over 12 months and 1.0% year to date in local currency terms. Germany has taken strong steps to open up its economy to international trade, taking advantage of a cheap euro, and has vowed to remain in the European Union. Furthermore, positive economic performance indicators suggest that the country’s economy is well positioned to face a fast-changing macroeconomic backdrop.

BNP Paribas Easy has launched the BNP Paribas Easy Low Carbon 100 Europe UCITS ETF (LCEU) on Deutsche Boerse’s Xetra and Frankfurt exchanges, providing access to European equities from firms displaying a high degree of environmental concern within their business activities. The smart beta ETF weights its constituents by the inverse of their carbon emission levels to further boost the ESG score of the fund.

FTSE Russell has launched two new indices tracking Chinese equities – the FTSE China A Innovative Enterprise Index series tracks fast-growing ChiNext stocks listed on the Shenzhen Stock Exchange, and the FTSE China A Stock Connect Index tracks mainland A-shares available to trade through the Shanghai-Hong Kong and the Shenzhen-Hong Kong Stock Connect Programmes.

Deutsche Asset Management is celebrating the 10-year anniversary of the listing of its first ETF – the db x-trackers MSCI World Index UCITS ETF (Xetra: XMWO) now boasts over €2.5bn in AUM. Over the past decade, Deutsche AM has grown into the second largest provider of ETFs in Europe, with €54bn in AUM representing 11.4% market share, and has established successful operations in Asia and the US. Reinhard Bellet, Deutsche AM’s Head of Passive Asset Management, commented: “Since the launch of our first ETF 10 years ago we’ve grown to become the biggest Europe-based globally operative provider of ETFs.”

During December 2016, UBS launched 30 ETCs on London Stock Exchange while BMO, Vanguard and iShares each unveiled a new ETF. BMO built out its suite of ‘Income Leaders’ ETFs with the launch of the BMO MSCI Emerging Markets Income Leaders UCITS ETF, Vanguard listed the Vanguard USD Emerging Markets Government Bond UCITS ETF, providing exposure to USD-denominated debt issued by emerging market Sovereigns, and iShares granted investors access to broad Swedish equities through the launch of the iShares OMX Stockholm Capped UCITS ETF.

By Jesper Koll, Head of Japan for WisdomTree.
Japanese risk assets – equities and real estate – remain on track for a multi-year structural bull market. For the new year, we anticipate strong performance, driven by an upturn in the business cycle in general, and the earnings cycle in particular. From a starting point of attractive valuations – TOPIX currently trades on a PE that is at a discount to both its own long-term average and to Wall Street multiples – we think Japanese equities could rise as much as 20%.

Boston-based Davis Advisors has become the latest player to enter the ETF space by launching three new actively-managed ETFs on Nasdaq Exchange. The funds offer exposure to US large cap, US financials, and global stocks while harnessing Davis’ fundamental bottom-up approach to stock selection. Chris Davis, Portfolio Manager and Chairman, Davis Advisors, commented: “Davis ETFs offer a differentiated combination of active stock selection and our proven time-tested investment discipline with the traditional benefits of an ETF.”

IndexIQ’s research team, including Adam Patti (pictured), CEO and Sal Bruno, CIO, have released its top five insights for market trends during 2017. The team notes that equity market volatility is likely to rise, divergent Central Bank policies may increase uncertainty for foreign exchange movements, and investors are likely to further shift assets into commodities. The firm also believes the ETF industry will continue to attract impressive amounts of net new assets with smart beta fixed income exposures being noted as a particularly strong avenue for growth.

UK large-cap equity ETFs have benefitted as the FTSE 100 Index achieved its longest winning streak on record, rising for 14 consecutive days until Friday 13 January and registering 12 record closing values in a row. The index is up 3.3% so far this year and a healthy 27.6% over the past 12 months, reaping the benefits of a weaker pound which serves to boost the competitiveness of British goods abroad. Investors may access FTSE 100 ETFs from providers such as iShares, Vanguard, UBS or HSBC, among others.

Europe-listed US equity ETFs raised €0.9bn of net inflows in December, thanks predominantly to strong demand for the iShares Core S&P 500 UCITS ETF (LON: CSPX) which by itself generated net gatherings of €0.6bn. Despite several predictions of a drop in US markets following Trump’s election, the equity rally has largely continued with Trump’s anti-regulation rhetoric turning fear to optimism and encouraging investors back into the market.