db X-trackers, Europe’s second-largest provider of exchange-traded funds (ETFs), is to launch a range of physically-backed ETFs that will sit alongside its existing swap-based line-up. Thorsten Michalik, global head of db X-trackers, said: “Investors will be able to go to a single provider and choose not only the type of market exposure they want, but also the type of tracking method they feel most comfortable with. Some client segments have shown a preference for direct replication, and as a provider we aim to meet that demand.”

S&P Dow Jones Indices has announced the launch of the S&P SMIT 40 Index, an index designed to measure the performance of 40 leading companies from four emerging markets: South Korea, Mexico, Indonesia and Turkey (“SMITs”). Interest in the SMITs has grown as a consequence of a period of strong stock market performance, during which returns of the SMIT countries have surpassed those of the BRICs.

Borsa Italiana, Italy’s main stock exchange and part of the London Stock Exchange Group, has celebrated the 10-year anniversary of its first exchange-traded fund (ETF) listing. From just eight ETFs in 2002 with €500 million in assets under management, the Milan-based exchange has grown to over 600 ETFs today with assets of around €18 billion.

FTSE Group and Shenzhen Securities Information, a subsidiary of the Shenzhen Stock Exchange, have signed a memorandum of understanding to facilitate the development of new indices for the China capital markets. Mark Makepeace, Chief Executive, FTSE Group, said: “China is one of the fastest growing markets and, as the A-Share market matures to be freely traded internationally, it will play a vital role both in the global capital market and in investor portfolios. We are proud to be a pioneer at the forefront of A-Share market development.”

STOXX has announced the introduction of the STOXX+ Global Max Traded 200 Index. The new index applies an advanced set of screens to ensure that only the largest and most frequently traded companies worldwide are included, while at the same time offering a wide global diversification. The STOXX+ Global Max Traded 200 Index is geared towards active trading purposes and has been designed to act both as a proper benchmark for actively managed funds, and to underlie exchange-traded funds (ETFs) and other investable products.

US technology sector exchange-traded funds (ETFs) rallied last week as tech giant and sector bellwether Cisco Systems (CSCO) surged after the company reported positive earnings results and issued a cautiously upbeat financial forecast. The positive results come after S&P Capital IQ last month upgraded the technology sector and gave ‘overweight’ ratings to a number of technology-focused ETFs.

Investor sentiment has risen sharply from the lows of July and global fund managers have increased allocations to equities, most notably in Europe, according to the BofA Merrill Lynch Survey of Fund Managers for August. Having turned their backs on Europe, especially the eurozone, for much of 2012 investors are becoming far less bearish on the region. Significantly, there are more investors wanting to underweight US equities than eurozone equities.

Equities in developed markets are increasingly viewed as undervalued, the CFA UK Valuation Index has revealed. The most recent publication of the CFA Society of the UK’s quarterly survey shows that 50% of respondents rated developed market equities as either ‘undervalued’ or ‘very undervalued’, compared to 39% in Q2. Global developed market ETFs such as the PowerShares FTSE RAFI Developed 1000 ETF (PSRD) or the HSBC MSCI World ETF (HMWD) provide an efficient way to capitalise on this potential opportunity.

Total inflows into the European ETF market in the second quarter (Q2) of 2012 were just $139 million as the ongoing eurozone crisis weighed heavily on investor sentiment in the region. Although European ETFs fared relatively better in Q2 than other investment products such as mutual funds and hedge funds, they were outperformed by the ETF market in the US, which appears on track for its best ever year.

Research from Legal & General Investments shows emerging markets to be the most popular geographical investment destination in the next six months, with two fifths (40%) of independent financial advisers (IFAs) choosing it as the likely best performer in the short term. When it comes to emerging markets ETFs, investors are spoilt for choice with a huge range of ETFs offering broad, regional, country and sector exposure.