By Jesper Koll, head of WisdomTree in Japan.

Our structural bull-thesis for Japan calls for an endogenous, self-sustaining domestic demand up-cycle that is driven by Japan’s private sector. Demographics is the key force – for households, the structural shortage of labour will be pushing up incomes and improving job security, thus creating purchasing power for a “new middle class”; and for companies, the scarcity of human capital will force a shift towards more capital-intensive business models.

Global ETP industry assets passed $4 trillion during May as net inflows of $45 billion were recorded, according to monthly flows analysis from BlackRock. The big gainers amongst ETF asset classes in May included broad Europe equity, EAFE equity and investment grade corporate debt.

The US ETF provider ALPS has announced the closure of the US Equity High Volatility Put Write Index Fund (NYSE Arca: HVPW). The fund will close to new investors on 21 June 2017 and will liquidate on 26 June 2017.

Exchange-traded funds and exchange-traded products listed globally reached a new record of $4.103 trillion in assets under management at the end of May 2017, according to data from London-based ETF industry consultant ETFGI. The month also saw assets in iShares ETFs/ETPs surpass $1.5 trillion.

Exchange-traded funds linked to the UK are feeling the impact of the surprise general election result which saw the Conservatives fail to secure the 326 seats needed for an absolute outright majority.

Five new ETFs and seven new ETNs were listed on London Stock Exchange in May 2017 bringing the total number of ETFs and ETPs listed on the exchange to 903 and 457 respectively. Issuers to launch ETFs/ETPs on the London market during May included Societe Generale, iShares, PowerShares, UBS and Lyxor.

Trading activity on the Tradeweb European-listed ETF marketplace reached a record-breaking €17.74 billion in May, narrowly beating the platform’s previous strongest performance of €17.73bn in March 2017. Adriano Pace, managing director for equity derivatives at Tradeweb, commented: “In May, more than 30% of the platform’s total traded volume was executed in ETFs offering exposure to European equities, as the election result in France and speculation ahead of the UK general election dominated headlines.”

About two-thirds of ETF users (67%) are using the vehicles to gain exposure to smart beta strategies, a considerable increase compared to 49% in 2014, according to the latest results of the 10th EDHEC European ETF and Smart Beta Survey. Professor Lionel Martellini, director of EDHEC-Risk Institute, said: “The survey confirms that transparency and the possibility of making explicit choices on risk exposures are key drivers behind investors’ growing appetite for smart beta.”

The VIX Index, a widely-followed measure of the uncertainty investors have around the short-term outlook for US equities, has been subdued for the best part of a year, despite a backdrop of seemingly heightened political uncertainty. So why is the VIX so low, and should investors be worried?

Chicago-headquartered portfolio management consultants Envestnet PMC has introduced a quantitative approval process for evaluating strategic beta ETFs, evaluating funds across cost, liquidity and performance. Brandon Thomas, chief investment officer of Envestnet PMC, commented: “We are firm believers that factor-driven investing can potentially produce superior results for clients, and we are glad to offer research-based quantitative guidance for advisors and investors.”