US-based sponsor of exchange-traded funds AdvisorShares has launched the AdvisorShares Cornerstone Small Cap ETF (NYSE Arca: SCAP), an actively managed ETF seeking capital appreciation by investing in US small cap equities with favourable fundamentals. The fund is the first actively managed ETF to successfully convert a track record from an existing investment structure, having originally been set up as a separate managed account by Atlanta-based investment manager Cornerstone Investment Partners. Noah Hamman, chief executive officer of AdvisorShares, commented: “…we’re proud to deliver another industry-first by successfully converting a track record from another investment structure, which now allows investors and advisors to access Cornerstone’s proven ability to deliver alpha through the daily transparency, intraday liquidity and overall efficiency of an actively managed ETF structure.”

Commerz Funds Solutions, a division of Frankfurt-based Commerzbank, has launched the ComStage Alpha Dividende Plus UCITS ETF, an actively managed exchange-traded fund primarily investing in European and US equities with high dividend yields. The fund employs a quantitative model that screens stocks based on high momentum, low price-to-earnings ratios (value factor), high profit growth (quality factor), low volatility and finally high dividends. The new ETF trades in euros and has a total expense ratio (TER) of 0.68%.

European bank ETFs have been given a boost in the wake of Brexit as regulators reveal they are unlikely to ask banks to create separately capitalised subsidiaries in the UK after the country leaves the European Union. According to unnamed sources, the Financial Times has reported that UK regulators have told at least one major EU bank it will not be required to set up a separate branch. The news is likely to be a welcome relief to the likes of Commerzbank, Deutsche Bank, Société Générale and BNP Paribas, who carry out UK business through European branches.

Actively managed ETFs and ETPs listed globally saw assets under management hit a record high of $38.2bn at the end of June 2016, according to ETF research consultancy ETFGI. The milestone was reached on the back of strong inflows during June 2016 with active ETFs/ETPs benefiting from $724m flowing in. Fixed income ETFs/ETPs gathered the largest net inflows during the month with $296m, followed by mixed asset class ETFs/ETPs with $247m, and equity ETFs/ETPs with $145m. The success of the active ETF/ETP space will likely be viewed as a testament to the growing popularity of ETFs/ETPs as investment vehicles rather than as supportive of the active management space.

The downfall of Sports Direct has shown that it is not just earnings growth and revenue, but also executives’ decisions and the quality of work for employees, that can affect a company’s share price and ultimately its future. As socially responsible investing becomes increasingly thematic these companies are inevitably falling under the spotlight. In a recent government report from the business, innovation and skills select committee found that Sports Direct International’s factory in Derbyshire was like a “Victorian workhouse.” The only socially responsible UK equity ETF on offer – the UBS MSCI United Kingdom IMI Socially Responsible UCITS ETF – excludes Sports Direct.

ETF provider WisdomTree has launched an equity ETF targeting firms considered likely to increase their dividend payouts in the future. The WisdomTree Eurozone Quality Dividend Growth UCITS ETF (EGRA) has been launched on the London Stock Exchange in euros and British pounds. It tracks WisdomTree’s proprietary in-house Quality Dividend Growth Indices, which uses specific criteria to establish which companies are growing their dividends. The strategy focuses on growth and quality. Viktor Nossek, Director of Research at WisdomTree Europe, said in a statement: “We believe that companies that can grow their earnings also have the greatest potential to raise their dividends.”

The affordability and sustainability of dividends paid by FTSE 350 companies has dropped to its lowest level for seven years, signalling that dividend cuts could be on the horizon. In this environment, income-focused investors might be wise to look to smart beta exchange-traded funds that focus on companies with a strong capacity to maintain dividend payments.

Deutsche Asset Management has launched its fourth US-listed multi-factor ETF. The Deutsche X-trackers Russell 2000 Comprehensive Factor ETF (NYSE Arca: DESC) is a smart beta equities fund that favours companies within the Russell 2000 Index with strong exposure to targeted investment style factors: value, momentum, quality, low volatility and size. It tracks the Russell 2000 Comprehensive Factor Index and has a TER of 0.30%. Fiona Bassett, Head of Passive Strategy in the Americas, said: “Academic research has identified certain stock characteristics that are important in explaining a stock’s risk and performance. Emphasising these factors can potentially make a significant contribution to outperforming traditional market-capitalisation weighted benchmark indices.”

Exchange-traded fund provider WisdomTree Europe has launched two ETFs targeting dividend-paying companies that have strong fundamental metrics with future dividend growth potential. Viktor Nossek, Director of Research at WisdomTree Europe, commented in a statement: “Investors are keen to explore more developed methodologies to gain access to dividend-related strategies and at WisdomTree, we believe in the power of dividends to deliver the potential for enhanced risk-adjusted returns.”

In the wake of the so-called ETF price war, the actual cost of ETFs has not reduced as much as some investors would have hoped, with prices only reducing by 0.03% in the last ten years. According to new data from Morningstar, the asset-weighted average total expense ratio of an equity ETF in the UK has only declined by 0.03% in the past decade to 0.32%. In the same time period the number of ETFs has risen from 119 to more than 550. James King, head of the private client department at wealth firm Price Bailey, said “The ongoing charge figure isn’t everything, but with vanilla type products it is pretty important.”