Recent volatility in currency markets has awakened investors to the negative effect currency movements can have on asset returns, but is this a call for wider adoption of currency-hedged strategies or simply short-term noise which should be ignored by long-term investors? Divergent central bank policies have driven significant currency swings in recent years. Unhedged equity returns have been eroded by moves like the Japanese yen falling 33.6% against the euro between July 2012 and December 2013 and the euro falling 22.1% against the US dollar between March 2014 and March 2015. Consequently, inflows into currency-hedged international equity ETFs have surged in 2015.

Stoxx, a leading European provider of equity indices, has announced the launch of the Stoxx True Exposure index family, which are designed to track regional and country exposures more intuitively. The indices provide a targeted approach to country and region allocation by selecting constituents based on where their revenue is generated. This differs from traditional indices which aggregate constituents based on country of domicile or primary listing, an approach which overlooks the underlying drivers of return and pays little attention to revenue overlap across geographies.

Assets invested in the global exchange-traded fund industry passed the $3 trillion milestone during May 2015. Deborah Fuhr, managing partner of ETFGI, commented: “Our forecast was that assets would break through US$3 trillion by the middle of 2015. It took the global ETF/ETP industry 19 years to reach US$1 trillion in assets under management, 23 years to reach US$2 trillion in AUM and just 25 years to reach US$3 trillion in AUM. The increasing rate of asset growth illustrates how ETFs have been embraced as an investment solution by institutional investors, financial advisors and retail investors around the world.”

Van Eck Global, the investment management firm behind the Market Vectors brand of ETFs, has announced the launch of the Market Vectors Morningstar International Moat ETF (MOTI), building upon the success of the US-centric Market Vectors Morningstar Moat ETF (MOAT) which has accumulated over $890m in assets under management (AUM) since its launch in 2012. The term ‘economic moat’ was coined by Warren Buffett and refers to the ability of a firm to maintain significant market share and protect their long-term profits.

WisdomTree Investments has announced that assets under management have surpassed $50 billion. WisdomTree launched its first ETFs in June of 2006 and has reached the milestone in under ten years’ time. The company’s approach to ETFs includes innovation at the index level such as fundamentally weighted ‘smart beta’ and currency hedged equity ETFs based on proprietary indices. Jonathan Steinberg, WisdomTree CEO & President, said: “I believe the movement to ETF investing is a structural, universal and irreversible trend because the characteristics of the ETF – transparency, liquidity and tax efficiency – are the qualities essential to a positive investing experience.”

UBS Global Asset Management has expanded its line-up of currency-hedged exchange-traded funds with the launch of the GBP-hedged UBS ETF (IE) CMCI Composite hedged GBP SF UCITS ETF (UC90) on the London Stock Exchange. The ETF is linked to the Bloomberg CMCI Composite Total Return index, a second-generation index which extends beyond use of short-dated futures contracts and diversifies investment across the maturity curve. The index is diversified across 26 commodities and five maturities. UBS is largest provider of currency-hedged ETFs in Europe.

Assets invested in ETFs/ETPs globally are just shy of the $3 trillion mark, having reached a new record high of $2.92 trillion at the end of February 2015, according to data from ETFGI. The record high coincides with the 25th anniversary of the listing of what is widely regarded as very first exchange-traded fund, the Toronto 35 Index Participation Fund, which launched on the Toronto Stock Exchange on 9 March 1990. “Twenty-five years marks an important milestone for the ETF industry which has grown significantly on many measures”, said Deborah Fuhr, managing partner of ETFGI.

Short and leveraged exchange-traded product specialist Boost has revealed that its triple leveraged oil product has enjoyed a surge of interest in recent weeks, with assets under management in the product just a rally away from reaching the milestone mark of $100m in assets. As at the time of writing, the Boost WTI Oil 3x Leverage Daily ETP (3OIL) had $87.8m in assets, meaning a relatively small amount of inflows or market gains could lift the product above the psychologically important $100m threshold. The ETP, which traded $273m in February, is listed on the London Stock Exchange, Borsa Italiana and Deutsche Börse’s Xetra platform.

Global ETP flows of $50.0bn in February represented the fourth best month on record and lifted the year-to-date total to $62.3bn, the best start to the year on record. Over the past month, investors favoured non-US equity and corporate bonds over relatively safer categories. Pan-European equity exposures brought in a new monthly high of $8.9bn, helped by the ECB QE announcement and a weaker euro. Fixed income flows strengthened to $17.8bn led by a new monthly record of $5.2bn for high-yield corporate bonds. Emerging markets equity funds showed signs of stabilization, gathering $2.7bn. US stocks rallied and US equity ETP flows rebounded to $3.9bn after heavy redemptions in January.

Stoxx, a leading European index provider, has unveiled the Stoxx Sharpe Ratio Indices, a first-of-its-kind index family that selects components according to their Sharpe ratio. The indices, which fall squarely into the “smart beta” camp, have been designed for use as underlyings to index-linked investment products such as ETFs or as benchmarks for actively managed funds. The inaugural line-up comprises global and regional indices which include stocks from their respective parent benchmarks that have the highest Sharpe ratios, while excluding those with low dividend yields and low liquidity.