Desjardins Global Asset Management has launched a new exchange traded funds (ETF) to complement the multifactor-controlled volatility category. The Desjardins Developed ex-USA ex-Canada Multifactor-Controlled Volatility ETF has closed the initial offering of units, and is now trading on the Toronto Stock Exchange (TSX). Desjardins Developed ex-USA ex-Canada Multifactor-Controlled Volatility ETF seeks to replicate, before fees and expenses, the performance of the Scientific Beta Developed ex-USA ex-Canada Multifactor-Controlled Volatility Index, a developed markets (ex-USA ex-Canada) multifactor-controlled volatility equity index. That invests primarily in international (ex-USA ex-Canada) equity securities. The 0,60 % annual management fee is based on a percentage of the net asset value of the corresponding Desjardins ETF, and are calculated daily and payable monthly in arrears, plus applicable taxes.
Direxion boosts leverage/inverse offering to capitalise on Trump policies
US provider of leverage and inverse ETFs Direxion has launched five leveraged ETFs, to further expand its existing lineup of over 75 leveraged and inverse ETFs.
The Direxion Daily Aerospace & Defense Bull 3X Shares will track the performance of the Dow Jones US Select Aerospace & Defense Index; the Direxion Daily Industrials Bull 3X Shares will replicate the performance of the Industrials Select Sector Index; and the Direxion Daily MSCI Mexico Bull 3X Shares will seek to replicate the performance of the MSCI Mexico IMI 25/50 Index.
In addition, the Direxion Daily Transportation Bull 3X Shares will track the Dow Jones Transportation Average and the Direxion Daily Utilities Bull 3X Shares will track the Utilities Select Sector Index
'President Trump has promised to make major changes to economic and trade policies,' said Sylvia Jablonski, Managing Director at Direxion, in a statement. 'If implemented, those policies could provide a boost for some sectors. These new leveraged ETFs allow traders the opportunity to surgically magnify their bullish perspective.'
ETF Sector Investments surge
New analysis from State Street Global Advisors (SSGA), the asset management business of State Street Corporation, has unveiled that there has been a five-fold increase in global assets of sector exchange traded funds (ETFs) since 2008, reaching US$394bion in assets under management (AUM) at the end of 2016, with US$35bn in flows last year alone.
The US experienced the greatest growth, where there was a 548% increase in sector ETF assets with US$30bn in flows last year. However, Europe came a close second with a 487% increase in sector ETF assets and US$3bn in total flows in 2016. Since 2008, the top three sector ETFs for investors globally have been technology sector ETFs with more than a tenfold increase in total AUM; followed by real estate sector equity ETFs with a 919% rise in total AUM; and then energy equity ETFs, which underwent a 599% growth in total AUM.
Breaking down the figures by region, over the last nine years real estate sector equity ranked the most popular sector, with Europe experiencing more than a tenfold increase in real estate ETF assets, and US$9bn in flows last year alone. The rest of the world saw total AUM increase from US$0.4bn in 2008 to US$9 billion in March 2017. The real estate sector also fared well in the US where there was a 831 percent increase in real estate ETF assets, with US$8bn in flows in 2016. However, technology proved the most favourable sector for investors with more than a tenfold increase in ETF assets, although total flows were down US$1bn last year.
Amundi licenses new Solactive low vol infrastructure gauge
Solactive has launched the Solactive Global Infrastructure Low Earnings Volatility Index used as the underlying index for the Amundi Global Infrastructure Ucits ETF listed for trading today on the Euronext Paris stock exchange.
The index tracks the performance of a global portfolio of 100 investable and liquid companies operating in the infrastructure space that exhibit the lowest volatility in reported earnings per share among their peers. Companies included in the index belong to sectors such as telecommunications, transportation, logistics, utilities and energy. Infrastructure companies are generally associated with steadier revenues due to the long-term nature of their projects compared to those in more cyclical sectors. Moreover, the role that infrastructure firms play in the provision of essential services makes their revenue streams relatively inelastic towards economic fluctuations.
The Solactive Global Infrastructure Low Earnings Volatility Index puts further emphasis on enhancing the stability characterising such companies by focusing on reducing exposure to earnings volatility. In addition, recent months have seen governments of countries such as the US, Japan and Canada make announcements of increased infrastructure spending. Therefore, the index also allows market participants to invest in companies that are likely to be affected by new plans of government-backed investment.
The Solactive Global Infrastructure Low Earnings Volatility Index is calculated as a net total return index and is denominated in EUR. Index constituents are weighted according to free float market capitalisation and are subject to weight caps of 4% per component and 25% per sector.
ETF Securities takes ownership of the ANZ ETFS joint venture
ETF Securities Group will take full ownership of the ANZ ETFS joint venture, launched in partnership with Australia and New Zealand Banking Group in May 2015.
Shayne Collins, managing director of markets, institutional at ANZ, said the decision to sell the stake in ANZ ETFS is based on the bank's desire to simplify its institutional business, and increase the focus on supporting client trade and capital flows across the region. ANZ ETFS have been rebranded ETF Securities Australia, a wholly-owned subsidiary of the ETF Securities Group, which is an independent provider of exchange traded products (ETPs) founded by its chairman Graham Tuckwell.
The ETF Securities Group plans to build on ANZ ETFS' initial success to make ETF Securities Australia a leading independent and specialist provider of investment solutions for Australian investors. The firm will continue to be led by Kris Walesby, the current head of ANZ ETFS.
The firm has 13 ETPs listed on the ASX (eight launched under the ANZ ETFS name and five existing ETF Securities products).
Deutsche AM brings Ucits ETFs and ETCs under one roof as sales momentum increases
Deutsche Asset Management (Deutsche AM) is consolidating its exchange-traded fund (ETF) and exchange-traded commodities (ETC) branding to 'Xtrackers' as the next step in pushing forward its growing passive business.
The current branding (db X-trackers ETFs and db-X ETCs) will be replaced with the single, unified Xtrackers to reflect Deutsche AM's focus on providing straight forward, high quality market index trackers. With the index tracking industry now far bigger than when Deutsche AM's first ETFs launched 10 years ago, and with thousands of products competing for investor attention, it was felt that a single, coherent product name reflecting the qualities of Deutsche AM's index tracking products would be easier and more memorable for clients to experience.
The rebrand is the latest development by Deutsche AM's Passive platform aimed at broadening the investor base. Deutsche AM has transformed its ETF business into one of the biggest providers of direct, physical ETFs in Europe, while introducing a range of low-cost Core ETFs. Year-to-date, Deutsche AM has registered over €2.7bn of inflows into its ETFs and ETCs.
The roll out of the new branding will take place over the next nine months subject to necessary regulatory approvals. The change will initially only alter marketing materials and will not impact the umbrella company names issuing fund shares. Any subsequent changes to operating company names will be announced to shareholders should they take place and in due course.
Franklin Templeton debuts suite of actively managed and strategic beta ETFs in Canada
Franklin Templeton Investments Corp. has introduced its Franklin LibertyShares platform in Canada, with plans to launch an initial suite of two actively managed ETFs and two strategic beta ETFs in the coming weeks.
Franklin Liberty actively managed ETFs will be managed by Franklin Templeton investment's team headed by Patrick O'Connor, global head of ETFs for Franklin Templeton Investments. The firm's first two actively managed ETFs, Franklin Liberty Risk Managed Canadian Equity ETF and Franklin Liberty Canadian Investment Grade Corporate ETF, are expected to be listed on the Toronto Stock Exchange (TSX) at market open on May 30, 2017.
Franklin LibertyQT strategic beta ETFs are based on 'fundamental and quantitative' analysis. Each LibertyQT ETF seeks to replicate a systematic, rules-based index that applies four custom factor weightings to its underlying index: quality (50%), value (30%), momentum (10%) and low volatility (10%). Franklin LibertyQT indices overweight the two greatest indicators of long-term performance: quality and value. With an emphasis on quality, each index seeks to identify securities that have potential for long-term performance and balance sheet strength. Also, two technical factors that have been incorporated are: momentum and low volatility. Momentum may help identify investment trends, while low volatility may help provide a defensive measure against market downturns.
The firm's first two strategic beta ETFs, Franklin LibertyQT U.S. Equity Index ETF and Franklin LibertyQT International Equity Index ETF, are expected to be listed on the TSX at market open on June 5, 2017. O'Connor will be providing insight on the evolution of index investing at the Exchange Traded Forum 2017 in Toronto on May 4 and 5, 2017.
South Africa's Cloud Atlas Investing adds to Africa-linked ETF offering
Cloud Atlas Investing has entered the South African exchange-traded funds (ETF) market with the listing of a tracker fund offering 50 African blue-chip companies outside South Africa on the Johannesburg Stock Exchange (JSE) last week. This the JSE already has two exchange-traded notes (ETNs) - Standard Bank's Africa Equity index and Deutsche Bank's MSCI Africa Capped 50 - offering portfolios of African shares, while Cloud Atlas Investing's AMI Big50 is the JSE's first Africa-focused ETF.
The new product brings the total number of ETFs now trading on the JSE to 53. The new ETF is similar to Standard Bank's Africa Equity index in that it excludes South Africa, while the Deutsche Bank's Africa Capped 50 is 55% comprised of South African companies. Standard Bank's ETN includes companies listed in London or other exchanges outside of Africa provided 85% of their revenue comes from the continent.
A key difference between ETFs and ETNs in South Africa is that the latter are permitted by the country's Treasury to be offered via tax-free savings accounts (TFSAs) provided they are not focused on a single commodity such as gold or platinum.
ETFs fall under the country's collective investment scheme rules, obliging them to own the underlying portfolio of shares or other assets. The rules governing ETNs are more lax, allowing them to synthetically track indices through derivatives. As the existing Africa-focused products offered by Standard Bank and Deutsche Bank are ETNs, they cannot be bought via TFSAs.
RBC Global Asset Management Global Real Estate Leaders ETF
RBC Global Asset Management has expanded its ETF lineup with the introduction of the RBC Quant Global Real Estate Leaders ETF which is aimed at complementing its RBC Quant Global Infrastructure Leaders ETF launched in September 2016. Both ETFs use a quantitative methodology and have been developed by the RBC Global Asset Management Quantitative Investment team led by Bill Tilford, Head of Quantitative Investments.
The ETF employs a rules-based, multi-factor approach to build a portfolio of global real estate investment trusts and real estate operating companies with attractive yields, strong balance sheets and stable cash flow. The ETF aims to provide stable, regular monthly income and long-term capital growth. The management fee of RGRE is 0.55% and is also available in a US dollar option.
RBC has now 20 ETFs available to investors that apply its proprietary quantitative investment approach which employs a specifically designed security selection and weighting methodology with the goal of maximizing risk-adjusted returns.