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Thailand ETFs braced for political instability amid growing humanitarian crisis

Feb 1st, 2017 | By
Thailand ETFs braced for political instability amid growing humanitarian crisis

Despite strong performance in the Thai stock market in 2016 – the MSCI Thailand Index rose 26.6% in local currency terms – ETFs tracking this market may be facing growing volatility ahead. Political instability caused by the new King’s refusal to ratify the military-penned constitution, a humanitarian crisis due to severe floods in southern regions, and ongoing corruption scandals are all serving as headwinds to future growth. However, investors who believe these risks are already priced into the market may wish to consider ETFs tracking Thai equities from Deutsche Asset Management or Lyxor.

ETF trading volumes reaching new highs in US and Europe

Feb 1st, 2017 | By
SIX Exchange reveals record ETF trading and listing activity during 2017

ETFs are dominating trading on American exchanges, and research suggests this trend is coming to European shores, although at a slower rate. Currently constituting 30% of all US trading by value, and 23% by share volume, ETFs made up seven of the ten most actively traded securities on US stock markets last year. In Europe ETF and ETP trading activity is also growing – on the London Stock Exchange alone, trading value in December grew by 63.5% compared to December 2015.

UK large-cap ETFs benefit from record FTSE 100 winning streak

Jan 16th, 2017 | By
ETFs profit as global markets rebound in April

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.

Donald Trump is ‘making Russian ETFs great again’

Jan 12th, 2017 | By
Donald Trump is 'making Russia ETFs great again'

In the world of Donald Trump’s post-truth politics, one fact remains undisputed: Russian equity ETFs have performed well in 2016 and analysts expect this performance to continue this year. The bounce back of crude oil prices and the olive branch from the US President-elect to Russian President Vladimir Putin helped the widely-followed MICEX Index to rise 27.6% during 2016 in Russian rouble terms, compared to a fall of 6.7% in the MSCI Emerging Markets Index over the same period. European investors may gain access to Russian equities through ETFs provided by Lyxor, iShares, Deutsche Asset Management, ComStage, RBS and HSBC.

Trump’s opposition to AT&T and Time Warner merger overshadows US sector ETFs

Jan 12th, 2017 | By
AT&T Time Warner Sector ETFs

US sector ETFs that invest in telecommunications and technology stocks are at risk after Donald Trump has opposed the $85.4bn deal to merge US telecom giant AT&T Inc and media behemoth Time Warner Inc. The US President-elect has described the merger as a “bad deal” leading to the shares of AT&T and Time Warner falling by 3.1% and 3.8% respectively on the day of the announcement. The firms’ equities had previously rallied around 10% since the election. Telecoms ETFs listed in Europe from Deutsche Asset Management and Lyxor hold almost 25% in AT&T.

Economic and military tensions weigh on South Korea ETFs

Jan 4th, 2017 | By
NH-Amundi launches long-term Korean Treasury ETF on KRX

ETFs tracking South Korean equities may experience a downturn in 2017 as the domestic economy has taken a turn for the worse, the country struggles to navigate a major political scandal, and the threat from north of the border has increased. As the fourth largest economy in the Asia region, South Korea still represents an important part of a balanced portfolio, but with slower predicted growth and risk creeping up, investors may wish to consider an ETF which offers better diversification.

Hargreaves Lansdown survey highlights volatility expectations for currency markets

Jan 4th, 2017 | By
Traders voice concerns over growth of passive investing

A recent survey from Hargreaves Lansdown found that respondents expect lively currency markets in 2017 with uncertainty surrounding politics, interest rates, inflation and growth, as well as developments in Brexit negotiations and the shape of Donald Trump’s presidency, seen as the major factors leading to volatility. In the face of such uncertainty, investors may wish to turn to currency-hedged ETFs to mitigate the risk of adverse currency movements impacting their portfolio, or use currency ETFs to express tactical views.

Will rising rates slow the organic growth of bond ETFs?

Jan 4th, 2017 | By
Deutsche launches US short duration high yield bond ETF

Driven by a growing awareness of the benefits of the ETF vehicle, including diversification, lower costs and ease of tradability, global investors poured $33.6bn into investment grade corporate bond ETFs and $7.4bn into high yield corporate bond ETFs in 2016 until the end of November, according to BlackRock. However, with the Federal Reserve recently increasing their expected number of rate hikes for 2017 from two to three, the anticipation of falling bond values from rising yields may begin to stem the flow of new money into these funds.

FCA crackdown to boost demand for leveraged ETFs

Dec 19th, 2016 | By
FTSE 100 ETFs rally as index passes 7,500

The Financial Conduct Authority (FCA) has announced its intention to crackdown on firms selling contracts for difference (CFDs), highly speculative financial products with margin requirements as low as 2%. The proposal for stricter rules for firms offering CFDs saw the share price of firms offering these products plunge, in one case as much as 40%. The tougher regulation may provide a boon for the leveraged ETF market however as the funds are considered a less aggressive alternative to CFDs.

Political instability weighs on Turkish equity ETFs

Dec 14th, 2016 | By
Political instability weighs on Turkish equity ETFs

Turkish equity ETFs have experienced increased volatility in the second half of the year as the Turkish lira has plummeted in value, the government fended off a military coup over the summer, and the economy suffered its first year-on-year contraction since 2009. The Turkish Borsa Istanbul 100 Index fell 13.3% in the seven days after the coup until 22 July. While the economy was previously heralded as a leading emerging markets performer, these developments have raised questions as to the suitability of Turkish exposures in investors’ portfolios.