Exchange rate volatility has spiked considerably over the past two months following the election of a new government in Japan. With murmurings that a “currency war” is about to break out, volatility in the FX market looks destined to remain at elevated levels for some time to come. This creates opportunities for investors looking to speculate on further shifts in the market. An effective way to capitalise on FX moves is via leveraged currency exchange-traded products (ETPs) which amplify the returns of currency pairs such as USD/JPY, GBP/USD, GBP/EUR and EUR/USD.

Guggenheim Investments has announced the launch of the CurrencyShares Singapore Dollar Trust (FXSG), an exchange-traded fund (ETF) tracking the Singapore dollar. Listed on the NYSE Arca, the fund provides pure exposure to the Singapore dollar by holding actual foreign currency deposits, not derivative instruments, while also delivering many of the benefits typically associated with ETFs, namely transparency, tax efficiency, trading flexibility, accessibility and liquidity.

Market Vectors has announced that the NYSE Arca-listed Market Vectors Solar Energy ETF (KWT) is to adopt an in-house index. The fund currently tracks the Ardour Solar Energy Index, an index designed by alternative energy specialists Ardour Capital Investments, but will switch to the Market Vectors Global Solar Energy Index in March.

IndexIQ, a US-based provider of niche exchange-traded funds (ETFs), is to shut the IQ Emerging Markets Mid Cap ETF (EMER). With less than $2m in assets, it appears the fund is just too small to justify its existence. By targeting the mid-capitalisation sector of publicly traded companies in emerging markets, the fund provided access to a niche market segment that is otherwise hard to reach. Fortunately for investors, there are alternatives to consider once the fund closes.

BNY Mellon has linked up with OTC Markets Group to develop the OTCM ADR Index, the first-ever index dedicated to American Depositary Receipts (ADRs) traded in over-the-counter (OTC) markets. OTC Markets Group is hoping that the launch of the index will generate added interest in the more than 1,400 international ADRs traded across its platforms, and that the index could one day lead to the creation of exchange-traded funds (ETFs) and other passive funds.

Almost four-fifths (78%) of financial advisers plan to increase their use of exchange-traded funds (ETFs) in retail investors’ portfolios over the next year, according to a poll carried out by Guggenheim Investments at Morningstar’s ETF Invest Conference in Chicago. The findings corroborate a recent survey by Invesco, which showed that advisers expect ETFs to make up 24% of portfolio allocations over the next 12 months and 33% over the next three years – an increase of 10% on the figure reported last year.

S&P Dow Jones and Deutsche Bank have unveiled the S&P-DB ORBIT Index, a co-branded index designed to measure the performance of the fast-growing offshore renminbi-denominated fixed income market. The offshore RMB, or so-called ‘dim sum’, bond market continues to grow as investors look for exposure to both the yuan and debt markets in China.

BlackRock has announced the launch of the iShares MSCI Frontier 100 Index ETF (FM), the first exchange-traded fund (ETF) benchmarked to the MSCI Frontier Markets 100 Index. The fund provides exposure to 20 frontier market securities that are specifically screened for liquidity. Representing 30% of the global population, frontier markets are forecast to be among the world’s fastest growing economies, driven by an expanding consumer class and a rich supply of natural resources.

With interest rates at historic lows and ongoing credit concerns and market volatility driving ever increasing cash levels, investors would be wise to rethink their cash allocations. In this ‘new normal’, investors should take a more sophisticated approach to the management of their cash portfolios and consider the creation of ‘liquidity tiers’ to better match asset duration to cash liabilities. As part of this approach, short-maturity ETFs can enhance portfolio returns while preserving capital and maintaining daily liquidity.