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Bats launches liquidity management provider program on ETF Marketplace

Jun 2nd, 2016 | By
Bats launches liquidity management provider program on ETF Marketplace

US electronic stock exchange group Bats Global Markets has launched a liquidity management provider (LMP) program on the Bats ETF Marketplace, in a bid to incentivise exchange traded-product liquidity providers to trade on Bats. LMPs who meet LMP requirements will be eligible for a rebate per share traded. Bryan Harkins, Executive Vice President, Head of US Markets, at Bats, said: “In addition to our existing Lead Market Maker Program, the LMP Program offers unique economic incentives tied to quoting activity.”


ETFs cheaper, but not always less risky, argues Natixis

Jun 2nd, 2016 | By
Natixis launches actively managed international minimum volatility ETF

According to research published by Natixis Global Asset Management, more than 75% of investors believe ETFs and other index funds provide a cheaper means of accessing the market; however, 71% also believe they are less risky than other investment vehicles. Natixis believes that while index funds and ETFs do provide a cost efficient means of accessing market exposures, a belief in their ability to reduce inherent market risks may be misplaced. John Hailer, CEO of Natixis Global Asset Management for the Americas and Asia, commented: “Index funds have a place in portfolios, but their low cost seems to be providing a ‘halo effect’ that could blind-side investors during volatile markets.”


Lyxor launches first UCITS ETFs to track inflation expectations

Jun 1st, 2016 | By
Francois Millet, head of product line management, ETFs & indexing, at Lyxor.

Leading European exchange-traded fund provider Lyxor has launched two new ETFs that provide investors with exposure to rising inflation expectations. The Lyxor USD 10Y Inflation Breakeven UCITS ETF (INFU) and Lyxor EUR 2-10Y Inflation Breakeven UCITS ETF (INFL) target the spreads between traditional bond yields and those of inflation-linked bonds, thus offering a pure play on inflation expectations without exposing the investor to changing interest rates. Francois Millet, Head of ETF and Index Product Development at Lyxor, commented: “Lyxor’s Breakeven UCITS ETFs gives investors exposure to the breakeven rate of inflation with the benefit of transparency and liquidity, thus turning it into a proper and investable asset class”.


Investors favour high div & low vol smart beta strategies, finds PowerShares

Jun 1st, 2016 | By
High dividend and low volatility strategies favourite among smart beta investors, finds Invesco PowerShares

Low volatility and high dividend smart beta strategies are the most popular choices with first time investors, according to research commissioned by Invesco PowerShares. Dividend and low volatility strategies attracted praise from 72% and 69% of first time smart beta users, respectively, stating they are likely to consider such strategies. Bryon Lake, Head of Invesco PowerShares – EMEA, said: “The findings of this research are confirmed by our market experience. We launched the PowerShares S&P 500 High Dividend Low Volatility UCITS ETF one year ago, and it has since then significantly outperformed its benchmark and attracted strong asset inflows.”


Smart beta uptake led by European institutional investors, finds FTSE Russell

Jun 1st, 2016 | By
Morningstar reports strong 7.5% quarterly growth in ETF Managed Portfolios

According to the third annual global institutional market survey – Smart Beta: 2016 Global Survey Findings from Asset Owners – FTSE Russell shows that smart beta index adoption rates in Europe have been the highest globally over the past three years. Of those European asset owners surveyed, 52% have adopted smart beta indices, compared to 28% in North America and 38% in Asia. The segment with the largest growth in adoption, from 15% in 2014 to 47% in 2016, has been European asset owners with under $1bn in assets.


Dow Jones ETFs in focus as index celebrates 120th anniversary

May 31st, 2016 | By
US equity ETFs in focus as Dow Jones celebrates 120th anniversary of launch

Leading global index provider S&P Dow Jones Indices has celebrated the 120th anniversary of the Dow Jones Industrial Average (DJIA), a widely followed indicator for US stock market performance. The index, designed to reflect the health of the broad US economy, is a price-weighted average of 30 stocks traded on the New York and NASDAQ exchanges. It also serves as the benchmark for several exchange-traded funds from providers such as State Street Global Advisors, iShares and ProShares.


Cerulli: Asset managers turn to ETFs for fixed income exposure

May 31st, 2016 | By
Fixed income ETFs to play greater role in portfolios, finds Tabula

An increasing number of asset managers are using exchange-traded funds to get passive fixed income exposure, according to research from global analytics firm Cerulli Associates. Cerulli found that the broad ETF industry experienced another month of positive net inflows with more asset managers using ETFs as vehicles for fixed income exposure. According to the report, US ETF assets grew for a third straight month in April, increasing 1.7% to finish just greater than $2.2tn. Flows into the funds were positive, at $8.9bn with significant demand noted for taxable bond ETFs, which garnered flows of $3.1bn.


ERI Sci Beta launches new pricing scheme for flagship indices

May 31st, 2016 | By
Singapore Exchange acquires smart beta index provider Scientific Beta

Smart beta index provider ERI Scientific Beta has announced a fresh approach to index pricing that may disrupt the traditional model of fixed fees on assets under management. Investors will be able to request a pure performance fee structure that levies charges only if the index has actually outperformed its cap-weighted benchmark. The fee structure is available on the Scientific Beta Multi-Beta Multi-Strategy indices. Noël Amenc, CEO of ERI Scientific Beta, said: “Our rationale for this mandate offer is that smart beta providers’ claims on the quality and robustness of their strategies should materialise in their live performance. ERI Scientific Beta’s initiative is intended to provide consistency between the smart beta provider’s revenues and the quality of its offering.”


Spotlight on US municipal bond ETFs

May 31st, 2016 | By
Spotlight on US municipal bond ETFs

The US municipal market is the largest in the world with total assets of over $3.7tn. ETF providers such as iShares, State Street Global Advisors, Van Eck Global and PowerShares all have funds with over $1bn in AUM covering the space. While municipal bonds may not repeat the kind of superior returns achieved in 2015 where they were the best performing asset type of that year, the stable outlook given across all 50 states from ratings agency Fitch along with the bond’s tax advantaged nature, may provide investors with an attractive means to increase their after-tax income returns.


iShares launches first MBS bond ETF in Europe

May 27th, 2016 | By
First Trust introduces actively managed long duration ETF

Global exchange-traded fund provider iShares has launched Europe’s first ETF to invest in high quality US mortgage-backed securities. The iShares US Mortgage Backed Securities UCITS ETF (IMBS LN) provides access to AAA-rated mortgage-backed securities issued by three agencies (Ginnie Mae, Fannie Mae and Freddie Mac) backed by the US government.Brett Olson, Head of iShares EMEA Fixed income, commented in a statement: “Mortgage-backed securities have the potential to offer higher yields than bonds of similarly high credit quality. This fund could be an option for investors looking to gain exposure to the US housing market in addition to corporate balance sheets.”