Nine new ETFs were launched on London Stock Exchange in September, bringing the number of ETF listings for the year to 100. Nine other ETPs have been listed on the exchange in 2016. iShares listed four global thematic ETFs, First Trust and ZyFin partnered to bring out Europe’s first physical Indian Equity ETF, PowerShares launched an ETF tracking US fallen angels, Source introduced a low volatility US equity ETF, Deutsche launched a USD Asia ex-Japan corporate bond ETF, and UBS rolled out a US corporate bond ETF with an interest rate hedge.

UBS Asset Management has launched the UBS Barclays US Liquid Corporates interest rate hedged UCITS ETF (LON: UCDH), providing access to a diversified basket of US corporate bonds while simultaneously hedging against interest rate risk. The fund caters to investors who are concerned about the impact to their portfolios from future increases in interest rates by the Federal Reserve. As of 13 October 2016 federal funds futures pricing implied a 20% probability for a rate hike in November but a 65% probability for December.

European exchange-traded fund provider Source has launched the Source RBIS Equal Risk Equity US UCITS ETF (LON: RUQR) in partnership with Risk Based Investment Solutions (RBIS), a subsidiary of Rothschild & Co. The ETF follows an equal risk contribution concept and aims to provide large-cap US equity exposure with lower volatility than traditional market cap-weighted strategies. Chris Mellor, Executive Director, Equities Product Management, at Source, commented: “We believe that this form of risk control offers a significant step forward beyond volatility targeting and minimum variance strategies.”

ProShares has launched the first crude oil ETF to deliver 1099 tax forms to the investor instead of the less desirable K-1 tax form. The ProShares K-1 Free Crude Oil Strategy ETF (Bats: OILK) is registered under the Investment Company Act of 1940, unlike other crude oil ETFs which are commodities partnerships. The fund uses active management to enhance returns through an optimised futures rolling strategy.

Assets under management within UBS’s Socially Responsible Investing (SRI) exchange-traded fund suite have surpassed the $1 billion mark. The suite, comprising both equity and fixed income exposures, is the most comprehensive SRI ETF product range in Europe. Andrew Walsh, Head of UBS ETF Sales UK & Ireland, said: “Reaching this milestone shows that investors are recognizing the importance of sustainability and are keen to use the opportunities offered by UBS SRI ETFs in their investment portfolio.”

JP Morgan Asset Management has introduced its first alternative and actively managed exchange-traded fund. The JP Morgan Diversified Alternatives ETF (NYSE: JPHF) provides investors with diversified exposure to hedge fund strategies including equity long/short, event driven and global macro strategies. Robert Deutsch, Head of ETFs for JP Morgan Asset Management, commented: “In the past, alternative investments have been an exclusive option only accessible by a small portion of investors; however, JPHF now makes these investment vehicles available to a wider array of investors.”

Index provider FTSE Russell has announced constituent changes to the FTSE 100 Index, the flagship reference for large-cap blue-chip stocks listed on the London Stock Exchange. The latest quarterly review will see only one member of the index being replaced, UK housebuilder Berkeley Group in favour of precious metals miner Polymetal International, but will still trigger re-balancing activity in exchange-traded funds that track the index, such as the giant iShares Core FTSE 100 UCITS ETF (ISF). It will also make such ETFs even less UK-oriented.

In a recent white paper, exchange-traded fund provider UBS found that ESG (environmental, social and governance) funds were just as good as conventional funds for the same risk. Also called ethical, sustainable or socially responsible, assets under management in ESG-compliant ETFs have risen nearly 45% to $3.4bn in the last 18 months, according to data from BlackRock, parent of iShares. And the trend looks like it will continue. However, a shortage of ETFs is holding back wider adoption, with portfolio managers frustrated by the lack of products on offer. According to Camilla Ritchie, portfolio manager at 7IM: “There are not enough SRI/ESG ETFs for all the different asset classes.”

The Shenzhen-Hong Kong Connect, a programme linking the Shenzhen and Hong Kong stock exchanges, has been given the green light to launch in December. The venture follows the successful launch of the Shanghai-Hong Kong Connect programme in November 2014, but will be the first of the two programmes to offer investors access to exchange-traded funds. Limits or quotas on how much foreigners can invest have also been lifted, thereby removing an important obstacle to the inclusion of China A-Shares in benchmark indices from MSCI and FTSE Russell – a move which would impact some major ETF allocations.

New research from exchange-traded fund issuer Source highlights the benefits of commodity ETFs that incorporate a dynamic trading strategy to manage exposure across the futures curve compared to those that are restricted to trading front-month contracts. According to the research, ETFs linked to so-called “second generation” indices, which deploy roll-optimised futures trading approaches, have delivered superior risk-adjusted returns compared to their “first generation” counterparts. Chris Mellor, Executive Director at Source, said: “Second-generation commodity indices generally offer better returns with a lower volatility than first-generation indices”.