Market Vectors Index Solutions has introduced the Market Vectors US Treasury-Hedged High Yield Bond Index, a new bond strategy index reflecting the performance of a long position in high-yield corporate bonds and a short position in US Treasuries. The index comes at a time when investors are becoming increasingly conscious of the potential negative impact of interest rate rises on bond returns but are nonetheless still keen to exploit the enhanced income associated with high-yield debt.

International Securities Exchange (ISE) and IndexIQ have announced a broad partnership to develop and launch a range of exchange-traded products (ETPs) linked to physical commodities. While ISE is perhaps best known as a US options exchange, the company has an established index business and recently has manoeuvred itself deeper into the fast-growing ETP industry. The link-up with IndexIQ, a niche provider of alternative ETFs, looks well suited as both companies have a demonstrated pedigree in creating innovative products.

Risks continued to ease in the fourth quarter of 2012, with no signs of a reversal ahead, according to risk specialists Axioma. Melissa Brown, Senior Director of Applied Research at Axioma, said: “The decline in risk should give investors the opportunity to focus on achieving active returns.” With predicted risk considerably reduced, now could be the time for risk tolerant sophisticated investors to consider tactically adding a degree of leverage to their portfolios via leveraged exchange-traded funds (ETFs) offering geared exposure to various markets.

Declining bond yields have created the potential for a ‘bond bubble’ under which rising interest rates could result in significant losses for fixed income investors, according to Fitch Ratings. So how should investors handle this? One option is to get out of bonds altogether. But, considering the diversification role bonds play and the income they offer, this is not entirely sensible or indeed practicable. A more moderate response would be to focus on shorter-duration bonds, which are less sensitive to interest rate rises.

Boost ETP has revealed plans to launch a suite of triple-leveraged long (3x) and short (-3x) exchange-traded products (ETPs) on the London Stock Exchange. The company expects to list up to 100 ETPs in the next two years, starting with a broad range of equities and commodities. Aimed at sophisticated and experienced investors, leveraged long and short ETPs provide instant leverage to underlying markets in one single trade, making it possible to accentuate and exploit opportunities in sideways-trending markets.

Boost ETP announced its launch on Wednesday, becoming the latest entrant in the fast-growing European exchange-traded products (ETP) market. The firm’s ambition to carve out a niche as a purveyor of more exotic products looks set to further energize the European market. The firm’s founders, Hector McNeil and Nik Bienkowski, have been active in the European ETP market since its genesis and were both formerly Managing Partners at ETF Securities, where they helped grow assets from just $50 million to $22 billion by the time they left.

Investors should be cautious about the continued success of volatility targeting investment strategies, despite historical data that show such strategies would have added value in recent years, according to a report from BNY Mellon. Volatility targeting investment strategies increase allocations to stocks during periods of low volatility and sell stocks when volatility is high. These strategies have been embedded into a number of rules-based indices as well as a range of volatility targeting ETFs.

Two relative newcomers to the US ETF game, Russell Investments and FocusShares, have signalled their retreat, reflecting the intense competitive pressures within the US market as ETF giants iShares, SPDR and Vanguard monopolise inflows. Meanwhile, elsewhere, US-based Direxion, Europe-based Lyxor and Canada-based Horizons have announced the pending closure or delisting (of secondary listings) of some of their less popular funds.

ProShares, a US-based provider of leveraged and inverse ETFs, has announced the launch of the ProShares UltraPro Financials ETF (FINU) and the ProShares UltraPro Short Financials ETF (FINZ). The ETFs have been listed on the NYSE Arca. The ProShares UltraPro Financials ETF seeks to provide 3x the daily performance of the Dow Jones US Financials Index, while the ProShares UltraPro Short Financials ETF seeks to provide 3x the inverse daily performance of the same index.

Direxion, a US-based provider of alternative ETFs, has announced changes to the benchmark indices of eight leveraged and inverse ETFs. The eight ETFs, which are currently benchmarked against Russell indices, will switch to indices managed by S&P. The switch marks an impressive win for S&P Indices, who are already enjoying a sharp rise in licensing activity thanks to the boom in ETFs.