By Jason Xavier, head of EMEA ETF capital markets at Franklin Templeton Investments.
Opportunities to invest nimbly in fixed income securities have traditionally been limited for all but large, sophisticated investors. The emergence of fixed income ETFs has changed that and brought some much-longed-for democracy to the fixed income arena.
By Nitesh Shah, director of research, WisdomTree.
The US appears to want to wage a trade war with the rest of the world. Although some countries are retaliating, we don’t expect most countries to drag themselves down the protectionist route. While global trade maybe damaged, the knock-on impact on global economic growth is likely to be small.
US-based ClearShares has launched its second ETF – the ClearShares Ultra-Short Maturity ETF (OPER US) – an actively managed fund investing in repurchase agreements (repos) backed by high quality fixed income collateral.
Innovator Capital Management has changed the name of the Innovator S&P High Quality Preferred ETF (EPRF US) to better reflect the mandate of the fund. “We believe renaming EPRF as the Innovator S&P Investment Grade Preferred ETF more accurately reflects the funds’ underlying holdings,” said Bruce Bond, CEO of Innovator.
WisdomTree has announced the launch of the WisdomTree Japan SmallCap Dividend UCITS ETF on London Stock Exchange. The fund tracks a proprietary index focused on dividend-paying small-cap stocks listed in Japan. Rafi Aviav, WisdomTree Head of Product Development in Europe, said the ETF “taps into the Japanese domestic economy while offering exposure to the size and value factors, which have been the clear winners from a factor perspective in Japan in the past decade.”
WisdomTree has launched the WisdomTree US Multifactor UCITS ETF on London Stock Exchange. The smart beta fund tracks a proprietary in-house index that provides exposure to large and mid-cap US equities selected using a multifactor methodology. “For those clients who don’t believe that they can add value by timing factors and don’t want to risk being overweight in the wrong factor at the wrong time, this provides a potential solution,” said Christopher Gannatti, WisdomTree head of research in Europe.
State Street Global Advisors, the asset manager behind the SPDR brand of ETFs, has replaced the indices underlying its Europe-domiciled US and European value ETFs. Mandy Chiu, Head of EMEA and APAC SPDR Product for SPDR ETFs, said: “We believe good factor strategies should provide high exposure to the targeted factors while keeping untargeted exposures in check…Altering the benchmark for these funds responds to client demand for greater intensity in their value orientation.”
AdvisorShares has launched two new actively managed ETFs – the AdvisorShares Dorsey Wright Micro-Cap ETF (DWMC US) and the AdvisorShares Dorsey Wright Short ETF (DWSH US) – on Nasdaq Exchange. Nasdaq Dorsey Wright serves as the portfolio manager to both ETFs. “DWMC and DWSH represent Dorsey Wright firsts, where we are managing micro-cap equity and short equity investment strategies that follow our core relative strength philosophy,” said John Lewis, CMT, senior portfolio manager at Nasdaq Dorsey Wright.
Seven issuers were active on London Stock Exchange in June, listing seventeen new ETFs or ETF share classes, bringing the total number of new listings (including ETPs) to 188 year-to-date. Lida Eslami, Head of London ETP Business Development, London Stock Exchange, commented: “We continue to see growing demand for ETPs both in terms of issuance and volumes traded in the first half of the year.”
By PIMCO’s Nicola Mai, portfolio manager, sovereign credit analyst and Andrew Bosomworth, head of portfolio management, Germany.
Over the next few years, financial markets could be set for a series of “Rude Awakenings”. The global economy is transitioning out of a post-crisis period characterized by remarkable stability, and the changes ahead could be jarring for investors. In Europe, this forecast appears to be unfolding already.