Online financial trading platform IG Group has announced it is offering commission-free trading on all ETFs to investors with an IG Stocks & Shares Individual Savings Account (ISA) during March and April. New and existing customers will be able to trade commission-free from a range of more than 1,200 ISA eligible ETFs.

The London Stock Exchange (LSE) has announced that its ‘request for quote’ (RFQ) platform for ETFs and ETPs, traded on the SETS and ETF – Euroclear Bank Settlement trading services, will go-live from Monday 13 March 2017. The RFQ functionality for ETPs has been designed to offer on-exchange benefits and cleared execution for larger size trades, allowing greater flexibility and protection for both institutional customers and responding market makers.

ETFs tracking the European banking sector have made consistent gains since June 2016, as shown by the Lyxor Stoxx Europe 600 Banks UCITS ETF rising 46.7% since its multi-year low in early July 2016. The turnaround followed a one year period of misery where the industry lost approximately 50% of its market capitalization. While an improving European economy and the expectation of higher interest rates has served to buoy share prices, the sector faces significant risks going forward.

Uber has partnered with digital investment manager MoneyFarm to provide its drivers with access to pension and ISA products for the first time in the UK. MoneyFarm, which currently offers pre-designed portfolios constructed exclusively with ETFs, will introduce an Uber co-branded pension product in the next few months, which will be targeted to the ride-hailing app’s estimated 40,000 partner-drivers in the UK.

In response to the FCA’s Asset Management Market interim report, low cost ETF provider Vanguard has called for a “health warning” on fees to be included as part of a “radically simplified” approach to investor communications. Under the proposal, Vanguard believes warnings on fees should receive equal prominence to those on past performance. Sean Hagerty, Head of Vanguard’s European business, commented: “Investors cannot control the markets, but they can control what they pay to invest, and that makes an enormous difference over time to their returns.”

Neil Woodford, one of the UK’s most famous active managers, underperformed mainstream equity indices in 2016, serving as a reminder that ETF investors could strike out on their own at much lower cost. His renowned £9.3bn Woodford Equity Income Fund generated just 3.3% in sterling terms last year, and costs 0.65% for institutional investors up to as much as 1.5% for retail investors. There are several rules-based UK equity income ETFs available as alternative options to the Woodford fund, from providers such as iShares, Source, WisdomTree, SPDR ETFs and PowerShares, all at a lower cost.

Inflation in the UK is forecast to reach a peak of 2.6% in mid-2018, rising from 1.6% in December 2016 and exceeding the Bank of England’s 2% target, according to the report issued by the Bank after Thursday’s Monetary Policy Committee meeting. However, with uncertainty over future wage growth, the terms under which Brexit will be enacted, and the future resilience of the economy, it remains to be seen whether such a forecast will come to pass. Investors looking to manage unexpected inflation in the future may wish to consider index-linked gilt ETFs, such as those from iShares or Lyxor.

By Nizam Hamid, ETF Strategist, WisdomTree.

The Supreme Court this week ruled that the UK government must hold a parliamentary vote before triggering Article 50 to begin the process of leaving the EU. We expect sterling volatility to continue over the coming quarter with Brexit and the economy remaining key influences. Other events that are likely to impact sterling in the coming months, include: Bank of England interest rates announcement (2 February 2017), UK Inflation (14 February 2017), UK Budget (8 March 2017) and Article 50 (end March 2017).

By Viktor Nossek, Director of Research at WisdomTree.
Given the near term economic outlook is solidifying in the US, stabilising in the emerging markets and moderating in Europe, we believe that European equity markets should prove resilient to the looming European political uncertainty in 2017 that could redefine the European economic and financial landscape for decades. For now, the banks’ efforts to fast-track restructuring and recapitalisation ahead of potential political fallout in 2017 are driving increased European equities strength.

During December 2016, UBS launched 30 ETCs on London Stock Exchange while BMO, Vanguard and iShares each unveiled a new ETF. BMO built out its suite of ‘Income Leaders’ ETFs with the launch of the BMO MSCI Emerging Markets Income Leaders UCITS ETF, Vanguard listed the Vanguard USD Emerging Markets Government Bond UCITS ETF, providing exposure to USD-denominated debt issued by emerging market Sovereigns, and iShares granted investors access to broad Swedish equities through the launch of the iShares OMX Stockholm Capped UCITS ETF.