By Michael Arone, Chief Investment Strategist, State Street Global Advisors (SSGA).
Despite 2019’s all-time market highs, the margin for error – and for opportunity – in 2020 will likely be as small it’s been in a while.
State Street Global Advisors (SSGA) has cross-listed the SPDR STOXX Europe 600 ESG Screened UCITS ETF on SIX Swiss Exchange. The fund, which launched in October, provides broad exposure to European equities while incorporating consideration of environmental, social, and governance (ESG) factors. It is the first ESG ETF based on the STOXX Europe 600 universe of large, mid, and small-cap companies from 17 European developed market countries.
By Holly Framsted, Head of US Factor ETFs within BlackRock’s ETF and Index Investment Group.
What does the word “risk” mean to you? In asset management, risk is commonly defined as standard deviation, or how much an investment’s returns vary from its mean return. However, I often find clients don’t think of risk in those terms, making some conversations difficult. Instead, many investors equate risk simply with losing money.
Sydney-based ETF issuer BetaShares has launched a new fixed income ETF, the BetaShares Sustainability Leaders Diversified Bond ETF – Currency Hedged (GBND AU), providing exposure to a globally diversified portfolio of ‘green’ and ESG-screened bonds. The ETF has been listed on the Australian Securities Exchange and is linked to the Solactive Australian and Global Select Sustainability Leaders Bond TR Index. It has been seeded by Future Super, a leading Australian retail superannuation fund.
Evolve Funds has unveiled a new actively managed ETF in Canada that seeks to maximize monthly income while preserving capital and liquidity by investing in high-interest deposit accounts. The Evolve High Interest Savings Account ETF (HISA CN) has listed on Aequitas NEO Exchange and comes with a management fee of 0.15%.
AgioFunds and its listing partner Beta Securities Poland have announced the launch of the Beta ETF WIG20short on GPW. The ETF allows investors to take a short position on the WIG20 Index, the foremost gauge of the Warsaw stock market. Robert Sochacki, Board Member of Beta Securities Poland, said, “The fund tracks the WIG20short index and provides returns when WIG20 is going down…We want to deliver investment solutions that offer all participants of the capital market a good fit for their perspective on the market outlook. This is why we are launching the WIG20short ETF.”
ETFs tracking biotechnology and other innovative healthcare firms have recorded impressive performance recently with several funds notching up returns in excess of 14% over the past month. The robust performance compares favourably to the S&P 500 Index which has returned 3.9% over the same period (data as of 26 November 2019). Leading the field amongst healthcare innovation ETFs is the actively managed $400m ARK Genomic Revolution Multi-Sector ETF (ARKG US) with a one-month return of 19.0%.
Goldman Sachs Asset Management (GSAM) has rolled out its three inaugural European-domiciled ETFs on Borsa Italiana. The Wall Street giant debuted the ETFs on LSE and subsequently cross-listed them onto Xetra and SIX Swiss. Two of the ETFs provide access to equity portfolios – US and EM – that have been weighted according to a multi-factor process. The third provides broad market exposure to Chinese government bonds. Loredana La Pace, GSAM’s Country Head in Italy, commented, “These investment tools, which are important for both retail and institutional clients, represent a significant addition to our international product range. We are very excited to be entering the Italian ETF market.”
TD Asset Management (TDAM), a subsidiary of Toronto-Dominion Bank, has rolled out ten new ETFs on Toronto Stock Exchange. The ETFs are all actively managed and deliver a range of equity, fixed income, and real estate exposures. Robert Vanderhooft, Chief Investment Officer, TDAM, commented, “Whether you’re looking for a one-stop income solution, global exposure, or a core equity ETF, our expanded offering provides greater choice and opportunity for investors in the fast-growing Canadian ETF market.”
By Matthew J. Bartolini, Head of SPDR Americas Research, State Street Global Advisors. Although the traditional allocation to bonds in a moderate portfolio is 40%, fixed income ETFs represent just 20% of the overall US-listed ETF industry. Despite the smaller share, fixed income ETF assets under management have grown at a faster pace than equity ETFs, 78% versus 68% over the past three years. That growth will likely accelerate due to four factors: Cost, Choice, Client Need and Comfort.