The interesting case of Russian (RSX) ETF flows

Is Russia now a buying opportunity or a value trap? An analysis of fund flows for RSX, the largest Russia ETF, shows some interesting results. RSX was down 17% during Q1 ‘14, yet assets in RSX grew by 15% during the quarter.

We used the First Bridge ETF data set to analyze this further and we see the following trend in daily ETF new flows. Net flows refer to new creations or redemptions in the ETF i.e.

Daily Net Flows = Daily Change in ETF Assets – Daily Change due to market movements

As we can see, after the first trading day… see full post

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Ukraine Crisis: Implications for ETF Investors

This article was co-authored with John Lunt, the President of Lunt Capital, a Salt Lake City based asset management firm. His experience in Ukraine goes back 20 years through his teaching engagements, board membership and personal travel.

The ongoing crisis in Ukraine is acknowledged as the most significant geo-political event in the last 10 years. In this article we examine the possible implications of these events for investors, with a specific focus on ETFs and index-based portfolios since that is our area of expertise.

Investors may have exposure to Russia in 3 ways that can impact their portfolios.

a)     ‘Direct’ exposure e.g…. see full post

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New article on smart beta ETFs

The area of smart beta ETFs has been getting a lot of attention. In a recent article on Seeking Alpha I sized this market for domestic equity exposure. I also made the argument that expecting smart beta to always outperform traditional market cap weighted ETFs is unreasonable, and that risk factors such as size, value and volatility go through cycles of under and out-performance. The full Seeking Alpha article can be accessed here.

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US ETF Asset Totals – Feb 2014

US ETFs grew to a record $1,727B as of February 28, 2014, an increase of 5.1% over the corresponding end January total. First Bridge Data released a breakdown of these assets by type of exposure / strategy, which showed that aggregate ETF assets increased for all the major asset classes, with the exception of currency ETPs. 15 new ETPs were launched in the US in February 2014, taking the net total number of ETPs in the US to 1568.

A summary of the asset totals can be accessed here.


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Municipal Bond ETF Landscape report

Municipal bonds is one of several asset classes that have become easier and cheaper to access through ETFs. There are currently 34 ETFs in the US that provide access to this asset class. In our landscape report published today, we take a brief look at the Muni ETF Landscape in the US.

The report can be accessed on our home page.

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Top 20 Indices by ETF Assets (US)

As of end January 2014, 99% of the $1.643T in Exchange Traded Product (ETP) assets in the US were linked either to a financial index or a commodity / currency.

So which indices account for the largest share of US ETP assets? In the table below we show the top 20 Indices by ETP assets. A couple of notes before we look at the table:

1) We have defined each index in a ‘pure’ sense i.e. we have not grouped all the variations of each index when counting assets. For example, variations on the S&P 500 Index such as the Equal… see full post

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ETF Product Launches in 2014 YTD (US)

35 new ETFs have been launched in the US in 2014 YTD (through Feb 14, 2014). The table below summarizes the new launches.

A full ETF product list is available here

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Feb 2014 ETF Landscape Report

Key highlights from our Feb 2014 ETF Landscape & Risk report:

ETP assets in the US fell to $1.64T as of January 31 2014 due to outflows and market declines. Equity ETFs saw total assets decline by $60.9b while bond ETFs saw assets increase by $2.9B.

January was marked by a sharp rise in the VIX, indicating that investors expect increased equity market volatility in the next 30 days. Some investors may want to evaluate low volatility ETFs as a way to stay invested in equities while reducing the magnitude of a potential drawdown relative to traditional market cap weighted equity… see full post

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ETF Asset Totals (Jan 31, 2014)

Assets for US listed ETFs were at $1,643B as of January 31, 2014, down by 3.4% from year end 2013 due to outflows and market declines. ETFs providing exposure to domestic US and Global (i.e. Ex-US international & global) equities saw total assets decline by $36.6B and $24.4B respectively, while bond ETFs saw assets increase by $2.9B.

The table below shows a breakdown of total assets as of January 2014 month end by type of exposure, along with the change from the previous month. A fully updated US ETF product list can be accessed at:

ETF /… see full post

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Currency Hedged ETFs: Horses for Courses

The success of DXJ (the Wisdom Tree Japan Hedged ETF) in 2013 was a very significant development for the ETF industry last year. It was important because it reinforced one of the biggest benefits of ETFs: the ability to get rules based, targeted access to a sophisticated investment strategy at a relatively low cost.

However, one of the consequences of this is a rush by ETF sponsors to launch new currency-hedged products. In general, more product choice is good for investors when accompanied by adequate education, but there are some important considerations to keep in mind.

1. The Yen’s fall in… see full post

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