UPFRONT
ETF UPDATE NEWS BRIEFS State Street names new leaders One of the giants of the asset management sector is looking to gain ground on the likes of BlackRock and Vanguard with two key appointments. State Street Corp. has announced the arrival of Nick Good and Rory Tobin as the new leaders of its ETF business. According to a Bloomberg report, Good, who is chief operating officer of the North American Intermediary Business Group, and Tobin, head of European distribution, will become co-heads of the business. They will take over from Jim Ross, who will become chairman.
New ETF designed to target millennials What are millennial investors looking for? Dangle the carrot of huge modern names like Facebook and Amazon in front of them, and you might just get them interested – and now it can be done via one ETF. According to a CNN Money report, the Global X Millennials Thematic ETF has been designed specifically to appeal to this younger group of investors. Its holdings are based on an index that is periodically updated; it includes two real estatefocused firms that are responsible for investment trusts, as well as companies such as PayPal, LinkedIn and Expedia.
WisdomTree branches out with corporate bond ETFs
WisdomTree has launched four corporate bond ETFs as it looks to give investors the chance to capitalize on the performance of selected issuers in the US corporate bond market. The four ETFs in question are the WisdomTree Fundamental US Corporate Bond Fund, the WisdomTree
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Fundamental US Short-Term Corpo rate Bond Fund, the WisdomTree Fundamental US High Yield Corporate Bond Fund and the WisdomTree Fundamental US Short-Term High Yield Corporate Bond Fund. The suite will use fundamental indicators to isolate and remove weaker and potentially troubled creditors, followed by a liquidity screen and risk-adjusted income score to tilt market value.
TSX hits a milestone for number of ETFs The Toronto Stock Exchange has passed another milestone for the number of ETFs listed on the exchange, now boasting more than 400. Since the beginning of 2011, the number of ETFs listed on the TSX has more than doubled, bringing total market capitalization to approximately $106 billion as of April 30. “The ETF segment continues to be a phenomenal growth story domestically, fuelled by Canadian ETF providers’ continuous innovation in product offerings,” said Nick Thadaney, president and CEO of global equity capital markets for TMX Group. “TMX remains committed to supporting its clients and the continuing evolution of the ETF.”
Apple takes a bite out of ETF assets There aren’t many companies that have an impact on ETF investors quite like Apple. At the end of April and into early May, the company wiped out in excess of $4 billion in ETF assets following a disappointing earnings report that led to a 16.3% decline. According to a Bloomberg report, the impact of the announcement saw the SPDR S&P 500 ETF Trust take a $1 billion hit in just a few days, while millions of dollars also disappeared from several other popular ETFs.
Keep an eye on Japan The Bank of Japan is in deep with ETFs, and its monetary policies could have a significant impact on the market this year Every month, investors and advisors alike keep an eager eye on interest rate announcements from the likes of the Bank of Canada and the US Federal Reserve. However, while the central banks in North America have offered nothing of great surprise in recent months, the Bank of Japan [BOJ] has had the markets flustered – primarily as it wades knee-deep into ETF investments. Back in April, the bulk of industry analysts expected the BOJ to add to its record stimulus. However, it chose instead to keep its existing monetary policy, notably maintaining its existing bond-buying and ETF purchases. The central bank actually introduced a negative rate of -0.1% on a portion of lenders’ reserves, despite outlining late last year that it would buy an additional ¥300 billion in ETFs in an effort to offset its plans to sell shares in financial institutions. Speaking to Bloomberg about the announcement, Nader Naeimi of AMP Capital Market Investors described the decision as a “total shock.” “From currencies to equities to everything – you can see the reaction in the markets,” he said. “I can’t believe this. It’s very disappointing.” Meanwhile, Andrew Clarke of Mirabaud Asia told the newswire that “investors are disappointed” and that many had been “wrong-footed” by the move. In May, the situation took another twist when former vice finance minister Tsutomu