Tag Archives: european

BlackRock Launches Double-Smart-Beta ETF Suite

5 new smart-beta ETFs launched by iShares. IShares adds another layer of smart-beta to currency-hedged ETFs. Minimum volatility helps further stabilize returns on already-popular ETFs. By Remzi Gokmen and Tom Lydon Blackrock has added to it’s iShares ETF suite by bulking up its smart-beta offerings with 5 new ETFs. The new exchange traded funds look to double their smart-beta approach by combining the minimum volatility strategy with a currency-hedged one. Their minimum volatility ETFs aim to curb some of the spikes that occur in a up and down market while staying invested while the currency-hedging approach has exploded this year with the forex market at heightened volatility and the dollar appreciating and cutting into investor’s international returns. Below are the names and tickers for the new suite. All will trade on the BATS exchange. iShares Currency Hedged MSCI ACWI Minimum Volatility ETF (BATS: HACV ) iShares Currency Hedged MSCI EAFE Minimum Volatility ETF (BATS: HEFV ) iShares Currency Hedged MSCI EM Minimum Volatility ETF (BATS: HEMV ) iShares Currency Hedged MSCI Europe Minimum Volatility ETF (BATS: HEUV ) iShares Currency Hedged MSCI Europe Small-Cap ETF (BATS: HEUS ) Robert Nestor, Managing Director and Head of iShares Smart Beta Strategy at Blackrock, said: Our minimum volatility suite allows investors the opportunity to gain broad market exposure and the potential for long-term growth, with the potential for less risk. Extending the suite to include currency hedged funds means those investors looking for broad minimum volatility exposure now have the added flexibility to do so on a hedged or unhedged basis, depending on their preferences. The iShares minimum volatility suite has enjoyed a great year with $2.8bn of net inflows this year and a total of $15.1bn in assets under management. iShares expansion into the smart-beta space has been exponential as they now have $125bn in assets under management in their smart beta products globally. The ETFs will track MSCI indexes that their minimum volatility cousins are already indexing. Diana Tidd, Managing Director and Global Head of MSCI Equity Index Products said: With the continued growth of global investing, the importance of managing currency exposures has moved to the forefront of many investors’ minds. Likewise, a growing number of investors are targeting specific factor exposures such as low volatility. MSCI’s Minimum Volatility 100% Hedged to USD Indexes reflect the performance of the combination of these two investment strategies. We are pleased BlackRock has further expanded their suite of iShares ETFs based on MSCI Minimum Volatility Indexes. The lone product in the suite that doesn’t feature a minimum volatility approach is HEUS. HEUS takes a small-cap spin to their European currency-hedged strategy. Small-caps tend to surge in recovery environments and Mario Draghi’s recent economic stimulus measure’s may stoke smaller enterprises’ growth. A snapshot of a popular iShares minimum volatility ETF shows some good signs. HEMV will duplicate the results of the iShares MSCI Europe Minimum Volatility ETF (NYSEARCA: EUMV ) with the currency-hedged spin, and EUMV kicked above its 200 day moving average in the October rally. (click to enlarge)

October ETF Asset-Flow Roundup

After a tumultuous Q3, it might be wise to look at how the $2.1 billion ETF industry performed in the first month of fourth-quarter 2015. Overall, the month came as a breather after a throttling third quarter. The major U.S. indexes finished October on a positive note on a stabilizing global economy, the promise of further monetary stimuli from the global superpowers and a dovish Fed. Let’s take a look at the corners that were the hot favorites of investors and those that were casted out. Our study concludes that income and international ETFs were the star performers in terms of asset gathering as these saw maximum inflows while the broader U.S. market was the laggard. Gainers High-Yield Bonds – SPDR Barclays High Yield Bond (NYSEARCA: JNK ) Hopes of a delayed Fed rate hike pushed bond yields down in October and investors piled up cash in high-yield bond ETFs, both for income and growth. Moreover, junk bonds are well attached with the energy sector. As energy securities cover about 16% of the high-yield bond market, a recovery in oil prices bode well for high-yield ETFs in the month. Thanks to this trend, JNK, a popular junk bond ETF, was at the helm, having added over $2.6 billion in assets in the month. This propelled its AUM to $11.9 billion. Two other junk-bond ETFs, iShares iBoxx $ Investment Grade Corporate Bond ETF (NYSEARCA: LQD ) and iShares iBoxx $ High Yield Corporate Bond ETF (NYSEARCA: HYG ) also added about $2.52 billion and $2.23 billion, respectively, to their asset base and took the second and third spots. LQD and HYG ended the month with about $24.7 billion and $15.4 billion, respectively. Nasdaq – PowerShares QQQ (NASDAQ: QQQ ) Technology earnings have turned out pretty well this season with the numbers not only bettering pre-season expectations, but also outperforming the sector’s performance in other recent quarters. This boosted investors’ lure for the tech-heavy Nasdaq ETF QQQ which took the fourth rank. QQQ hauled in about $1.73 billion to exit the month with $37 billion in assets. Europe – iShares MSCI EMU ETF (NYSEARCA: EZU ) The European markets roared back in the month on the European Central Bank (ECB) president Mario Draghi’s reassurance of a more intensified and protracted QE measure, if need be. Sensing further easing potential, STOXX 600 added about 8% in October underscoring the largest monthly rally in six years. Investors also poured in $1.56 billion, the fifth largest in the list, to be part of this rally. EZU has now amassed over $13 billion. Losers U.S. – SPDR S&P 500 ETF Trust (NYSEARCA: SPY ) Despite the Fed-induced bounce, U.S. stocks – small and large – could not rope in investors’ attention. While global growth fears weighed on the S&P 500-based large-cap ETF SPY, a volley of weak U.S. economic data came in the way of Russell 2000-based small-cap ETF iShares Russell 2000 (NYSEARCA: IWM ). After all, U.S. economic growth tallied 1.5 % in Q3, falling short of expectation of 1.6%. The products, SPY and IWM, witnessed an outflow of about $827 million and $632 million, respectively. Short-Term U.S. Bonds – iShares 3-7 Year Treasury Bond ETF (NYSEARCA: IEI ) Though the bet over a faster rate hike eased in October, the investing world has started to prepare for a Fed lift-off by this year-end or early next year. Since short-term bonds are expected to underperform the most on an expected rise in benchmark interest rates, short-term bond ETFs fell out of investors’ favor. Moreover, short-term bond ETFs sport meager yields – another reason for the disfavor to yield-starved investors. Hence, IEI had to sacrifice about $511 million in net assets while iShares Short Treasury Bond ETF (NYSEARCA: SHV ) surrendered about $507 million. Biotechnology – iShares Nasdaq Biotechnology (NASDAQ: IBB ) Nagging concerns over the biotech space regarding the over pricing of life-saving drugs shifted this hot and soaring sector from its lofty position a bit. Though the downing trend is reversing lately, October was an off month for the biotech sector. The biotech fund IBB saw a net exodus of about $497 million in assets. Original Post

Lipper Fund Flows: Gains For All Groups

By Patrick Keon Lipper’s fund macro-groups (including both mutual funds and exchange-traded funds [ETFs]) experienced aggregate net inflows for the fourth consecutive week-taking in over $56 billion of net new money during that time. The groups had positive flows of $24.8 billion for the fund-flows week ended Wednesday, October 28, paced by money market funds, which had net inflows of $15.7 billion. The other macro-groups all posted gains for the week as well; equity funds took in $8.4 billion of net new money, while taxable bond funds (+$432 million) and municipal bond funds (+$349 million) recorded more modest increases. The Dow Jones Industrial Average (+3.6%) and the S&P 500 Index (+3.5%) both posted strong performance numbers for the week. The indices were bolstered by improving economic data on the home front, stronger-than-expected corporate earnings reports from the technology sector, measures to ease global growth concerns, and the Federal Reserve’s leaving the window open to a possible interest rate hike before year-end. The week got off to a roaring start as both indices pocketed roughly 2.8% in combined gains during the first two trading days. Strong U.S. economic data and talk of more quantitative easing in Europe were the triggers on Day One. U.S. existing-home sales posted strong numbers for September (+4.7%), while new applications for unemployment benefits were at near-40-year lows. Across the pond, European Central Bank President Mario Draghi stated that the central bank may extend stimulus measures if global growth continues to be a concern. The rally continued on Day Two as tech companies Alphabet Inc., Microsoft Corp., and Amazon.com all posted stronger-than-expected earnings, while China announced a surprise interest rate cut (its sixth in less than a year) in an attempt to revive its slumping economy. The market experienced another bump on the last trading day of the week when the Fed hinted that the long-awaited interest rate increase may finally arrive in December. The Fed indicated that the global landscape will become less of a concern in December’s discussion, and the determining factors will be the next two monthly jobs reports (the Fed is looking for some additional improvement) and the inflation rate (for which the Fed has set a 2% target). The week’s net inflows for money market funds (+$15.7 billion) represented the fifth week in six of positive flows, which brought over $55 billion of net new money into the group. Institutional money market funds (+$11.6 billion) and institutional U.S. government money market funds (+$8.6 billion) were the two largest contributors to the week’s gains. Equity ETFs were responsible for the lion’s share of the net inflows (+$8.2 billion) for the equity group, while equity mutual funds contributed $221 million to the total. The SPDR S&P 500 Trust ETF (NYSEARCA: SPY ) (+$2.5 billion) and the Health Care Select Sector SPDR ETF (NYSEARCA: XLV ) (+$769 million ) had the two largest individual increases on the ETF side. For mutual funds-contradicting the trend we’ve seen all year-nondomestic equity funds had net outflows for the week (-$339 million), while domestic equity funds had positive net flows (+$560 million). Mutual funds were responsible for all the net inflows for taxable bond funds (+$660 million), while ETF products saw $228 million leave their coffers. Lipper’s High Yield Funds and Core Plus Bond Funds classifications (+$787 million and +$570 million, respectively) recorded the two largest net inflows on the mutual fund side. For ETFs, two Treasury products had the largest individual net outflows: The iShares 7-10 Year Treasury Bond ETF (NYSEARCA: IEF ) (-$602 million) and the iShares 3-7 Year Treasury Bond ETF (NYSEARCA: IEI ) (-$410 million). Municipal bond mutual funds took in $148 million of net new money-for their fourth consecutive week of positive flows. Funds in Lipper’s High Yield Municipal Bond Funds classification (+$181 million) accounted for all of the week’s net inflows.