Stocking fillers for your bond portfolio
Dec 9th, 2019 | By GuestBy the Cross Asset and ETF Research Team at Lyxor Asset Management.
It’s that time of year when we look back at what might have been – and what’s to come in 2020.
By the Cross Asset and ETF Research Team at Lyxor Asset Management.
It’s that time of year when we look back at what might have been – and what’s to come in 2020.
BMO Global Asset Management is to withdraw from the European ETF market. In a letter to shareholders in its ETFs, the asset manager announced its intention to close all of its London-listed ETFs and cease managing ETFs domiciled in Europe. It said the decision was based on a variety of factors, including the current level of assets under management and projected asset growth in the current market environment. The ETF closures raise some important questions with respect to fund due diligence and issuer viability.
Lyxor has rolled out a euro-hedged share class for its Lyxor JPX-Nikkei 400 (DR) UCITS ETF on Xetra. The share class (JPNE GY) hedges currency risk between the Japanese yen and the euro on a daily basis.
Lyxor has completed the integration of Commerzbank’s asset management business which includes €16 billion of assets under management and the ComStage suite of ETFs. The combined entity offers one of Europe’s largest ETF ranges, with over 300 products. Lionel Paquin, CEO of Lyxor Asset Management, said, “With a platform founded on ETF expertise and innovation, active asset management and a deep understanding of the German retail market, I am convinced that together we will be even better placed and better equipped to support our clients as their needs evolve”.
Amundi has launched a new ETF in Europe enabling investors to capitalize on rising inflation expectations in the US. The Amundi Index Breakeven Inflation USD 10Y UCITS ETF targets the spread between conventional fixed-rate Treasury bond yields and those of inflation-linked bonds, thus offering a play on inflation expectations without exposing the investor to changing interest rates. It has listed on Euronext Paris in US dollars (BINFU FP) and on Euronext Amsterdam in euros (BINFU NA).
BlackRock has launched five new ETFs in Europe providing exposure to the consumer discretionary, consumer staples, energy, healthcare, and information technology segments of the global equity market. The new funds are linked to MSCI sector indices derived from the MSCI World Index and have been listed on Deutsche Börse Xetra in euros and on Euronext Amsterdam in US dollars. With TERs of 0.25%, they become the cheapest world sector ETFs available in Europe.
Vanguard has reduced the fees charged on 13 of its European domiciled ETFs. The reductions vary from between two and seven basis points and are set to save investors approximately $4.2 million per year, based on current assets under management. Sean Hagerty, Head of Vanguard for Europe, commented, “For too long, investors have been poorly served with high-cost, complex investments…There is still a misconception that the more you pay for an investment, the better it performs. In reality, costs really impact the returns investor make – every pound paid in fees is a pound off investors’ returns.”
Twelve new ETFs or ETF share classes were listed on the London Stock Exchange in September 2019, taking the total number of ETF listings on the exchange to 1,241, available through 1,802 different share classes. ETF providers active during the month included BlackRock, Fidelity, Goldman Sachs Asset Management, Legal & General Investment Management, Lyxor, WisdomTree, and Vanguard.
Lyxor has expanded its green bond offering with the launch of the Lyxor Green Bond ESG Screened (DR) UCITS ETF (XCO2 GY). The fund is Lyxor’s second ETF to focus on the investment-grade green bond market. Listed on Xetra, the fund differs from its debut green bond ETF, the €132m Lyxor Green Bond UCITS ETF (CLIM LN), by incorporating an environmental, social, and governance (ESG) screen to exclude issuers in violation of the principles of the UN’s Global Compact or operating in controversial areas such as tobacco, alcohol, weapons, nuclear energy, and fossil fuels.
By the Cross Asset and ETF Research Team at Lyxor Asset Management.
We’re entering the final quarter of 2019 after a bumpy summer of trade disputes and recession fears. How should investors position equity portfolios to see out the year?