All entries by this author

US small cap ETFs losing steam as GDP growth disappoints

Mar 1st, 2017 | By
S&P 500 and the US presidential election

One of the biggest winners after the US presidential election were small-cap equities, yet small-cap US ETFs have lost out to their large-cap counterparts so far this year as GDP growth has fallen short of expectations. The US saw annualised GDP growth of 1.9% in the last quarter of 2016, falling short of expectations of 2.1%, while small-cap ETFs have returned approximately 2.4% year-to-date compared to 5.4% for their large-cap equivalents.

European equity ETFs stage strong start to 2017

Feb 27th, 2017 | By
WisdomTree: Why you can't afford to miss European small caps

Investors in European equity ETFs have enjoyed a bullish start to the year as local companies have gained ground amid positive economic and corporate earnings data – the MSCI Europe Index is up around 2.9% year to date in EUR terms, reflected in a range of ETFs tracking the index. Despite the strong performance, headwinds remain for the region with analysts noting a slowdown in global growth as well as political uncertainty over several key elections as potential disruptors to the continent’s growth momentum.

Lipper report finds ETFs gaining ground in ‘efficient’ markets

Feb 24th, 2017 | By
S&P DJI reports strong factor performances in Q2

Research from Thomson Reuters Lipper found that, across 107 global asset class classifications, 75 of the categories displayed a directional divergence in net flows between active mutual funds and ETFs listed in Europe. According to Lipper, the figures showed that ETFs are gaining a greater relative share of assets in categories covering efficient markets while investors are still preferring active funds over ETFs where market inefficiencies present opportunities.

Calm markets leading investors away from low-volatility ETFs

Feb 24th, 2017 | By
Whitford enters ETF space with Volshares fund launch

Investors have begun to shift away from low-volatility ETFs – in direct contrast to strong net inflows for other smart beta funds – as equity markets continue to make strong gains and disruptions remain significantly low. Thus far this year, the VIX has fallen to below 10 points, the first time it has done so in a decade, while several global and US equity indices have reached record highs. Consequently, investors have begun voting with their feet, globally withdrawing $600m from low-volatility ETFs in January.

Source commodity ETF records massive inflows as investors seek diversification

Feb 22nd, 2017 | By
S&P Dow Jones Indices announces S&P GSCI composition for 2018

Data from Thomson Reuters Lipper shows that the best-selling ETF in Europe during January was the Source Bloomberg Commodity UCITS ETF A USD (LON: CMOD), which gathered around €800m. The strong inflows into the Source ETF helped mark a turnaround for Europe-listed commodity ETFs, which gathered approximately €600m total net inflows, as investors sought to diversify their portfolios.

French government bond ETFs in focus as Le Pen/Macron showdown looms

Feb 13th, 2017 | By
Le Pen Macron French Government Bond ETFs

French government bond ETFs have been granted a small reprieve after a burst of bond buying last week eased the 10-year yield back to 1%. Yields had previously risen from 0.1% last August to a peak of 1.1% in early February 2017; the iShares France Government Bond UCITS ETF consequently dropped more than 7% over that period. Despite the small pull-back in yields recently, longer-term uncertainty remains in the run-up to the French election.

Mexican equity ETFs face volatile future

Feb 6th, 2017 | By
WisdomTree cross-lists eight ETFs on Mexico’s stock exchange

Mexican equity ETFs have traveled a bumpy road over the last few months thanks to political turmoil and a general performance slowdown in emerging markets. The Mexican Bolsa Index plummeted more than 8% in the ten days following the 2016 US Presidential election as investors priced in the risk of worsening US-Mexican relations under President Trump. The index returned 6% in 2016, underperforming the MSCI Emerging Markets Index return of 11%. Investors who believe the Trump risk is now fully priced in may wish to consider Mexican equity ETFs from iShares, HSBC or Deutsche Asset Management.

ETFs to emulate Neil Woodford’s equity income fund

Feb 3rd, 2017 | By
Neil Woodford

Neil Woodford, one of the UK’s most famous active managers, underperformed mainstream equity indices in 2016, serving as a reminder that ETF investors could strike out on their own at much lower cost. His renowned £9.3bn Woodford Equity Income Fund generated just 3.3% in sterling terms last year, and costs 0.65% for institutional investors up to as much as 1.5% for retail investors. There are several rules-based UK equity income ETFs available as alternative options to the Woodford fund, from providers such as iShares, Source, WisdomTree, SPDR ETFs and PowerShares, all at a lower cost.

Index-linked gilt ETFs in focus as BoE highlights inflation risk

Feb 3rd, 2017 | By
UK government sells negative-interest gilts for first time

Inflation in the UK is forecast to reach a peak of 2.6% in mid-2018, rising from 1.6% in December 2016 and exceeding the Bank of England’s 2% target, according to the report issued by the Bank after Thursday’s Monetary Policy Committee meeting. However, with uncertainty over future wage growth, the terms under which Brexit will be enacted, and the future resilience of the economy, it remains to be seen whether such a forecast will come to pass. Investors looking to manage unexpected inflation in the future may wish to consider index-linked gilt ETFs, such as those from iShares or Lyxor.

Brazilian equity ETFs buoyed but economic recovery still to materialize

Feb 1st, 2017 | By
BlackRock lists MSCI Brazil ETF on Xetra

Brazilian equity ETFs continue to bring investors positive returns despite forecasts of a significant economic upturn having thus far failed to materialize. GDP will grow just 0.5% in 2017, according to a central bank survey, while the IMF recently cut its growth outlook for Brazil to 0.2%. Despite the mediocre figures, the Brazilian Bovespa Index is up more than 7.3% year to date and over 60% in the past 12 months. Investors may gain access to Brazilian equities through an ETF wrapper from providers such as iShares, Amundi, HSBC, Lyxor and Deutsche Asset Management.