When do sectors matter, and what can you do about it? Sometimes the sector composition of an equity portfolio strongly affects its returns. At other times, single stock effects or overall market effects dominate. Sector-based products such as ETFs and futures have been around for decades, but recently they have attracted growing interest. Exhibit 1 Read more […]
Over the past few months, there has been a flurry of activity in the financial advisor segment of Australia. In mid-September 2018, S&P Dow Jones Indices (S&P DJI) hosted an exchange-traded fund (ETF) seminar in Perth, Western Australia. This was S&P DJI’s second foray in the West, and with Perth being one of the world’s Read more […]
Our colleagues at S&P Global Market Intelligence recently completed a paper analyzing the impact of exchange-traded funds on stock-level pricing. Their work found that “…the impact of ETF trading is transient and of only a modest magnitude under even extreme assumptions” (my italics). This conclusion is a rebuttal to critics who believe that the growth Read more […]
Investment strategies that switch between sectors or industries – and the related activity of using sectoral performances to discern broader macroeconomic trends – have long been an part of professional investing. However, it is surprisingly difficult to find even basic research explaining how sectors are classified, why they are important and how they might be Read more […]
Until 2013, the exchange-traded fund (ETF) industry in India was in a nascent stage, with negligible assets under manager (AUM). As of Dec. 31, 2013, the total AUM for ETFs was INR 8,000 crores (or USD 1.2 billion), out of which commodities-based ETFs tracking gold noted the largest share, with total AUM of INR 6,500 Read more […]
The first Exchange Traded Funds (ETFs) tracking municipal bonds were launched in September 2007. Since then the municipal ETF market has grown to 40 ETFs representing over $30.5billion in assets under management. Municipal Bond ETF Market Snap Shot: 40 ETFs all but one represents tax-exempt municipal bonds. There is one ETF tracking taxable municipal bonds. Read more […]
Dividend investing is an ever popular topic across different markets. Market participants have been using ETFs to implement various dividend strategies for more than a decade. The first dividend ETF, the iShares Select Dividend, was launched in 2003. Nevertheless, dividend ETPs have experienced tremendous growth in assets since year-end 2009. As of June 30, 2017, Read more […]
Here are some recent headlines about the consequences of passive investing: Japan Central Bank’s ETF Shopping Spree Is Becoming a Worry Passive Market Share to Overtake Active in the US No Later than 2024 Passive investing boom is creating a ‘frightening’ risk for markets ETFs are taking over the world, and there’s nothing anyone can Read more […]
This morning’s Wall Street Journal described how “a $1.4 billion ETF gold rush” supposedly has disturbed the pricing of mining stocks around the world. $1.4 billion turns out to be the incremental cash flow into a single exchange-traded fund designed to track an index of the gold mining industry, including some relatively small-capitalization companies. These Read more […]
New exchange-traded funds (ETFs) are being created, and while that means we can expect innovation throughout the fund and indexing industries, “a proliferation of new funds could mean heightened risks for investors, particularly regarding ETFs, because many of those funds don’t trade frequently, making them more volatile.”[1] ETFs are arguably responsible for a rapidly democratizing Read more […]
