ETF Updates Archive

Active Management Comes To Emerging Market Bond ETFs

WisdomTree has introduced an addition to the ETF landscape with an active ETF in the emerging market bond category.

Emerging market bonds are a unique asset class with extraordinary characteristics which many ETF investors have made part of their portfolios for many reasons. Emerging market bonds have high absolute returns with low correlation to other markets and are high yielding vehicles.

Of the products on the market, the WisdomTree fund is the only local currency and actively managed ETF.

Lower Duration For Better Inflation Protection

TIP Securities have been around only since 1997, placing them a time period with only relatively tame levels of inflation. That being said, the need for inflation protection is very relevant, and investors now have access to five TIPS ETFs. They give investors a choice among broad based, intermediate, short-term, and long-term durations.

Gravitating towards shorter duration bond holdings in the TIPS marketplace will mean choosing a higher correlation with inflation, lower volatility, and only small yield differences. PIMCO is currently the only ETF issuer with a full family of TIPS exchange-traded products.

Duration is a measure of the average life of a bond.

International Corporate Bond ETFs Have Arrived

PowerShares listed the second-ever international corporate bond ETF for trading this week, behind State Street Global Advisor’s international corporate bond product, falling right in step with the unfolding of the debt crisis in Europe. The PowerShares ETF provides a broad exposure to international, investment-grade corporate bonds issued in developed countries.

PowerShares International Corporate Bond Portfolio (PICB) is designed to track the S&P International Corporate Bond Index.

Fixed Income ETF Assets Climb

ETF cashflows have climbed despite worries about rising rates in fixed income ETFs. Investors also seem to be pouring money into global ETFs even though overseas markets continue to abound.



Among issuers, there are no major changes year-over-year. In April 2009, the National Stock Exchange reported that the number of ETFs and ETNs on the market was 844, 89% of those being ETFs.

Inside ETFs - Europe

I feel like I have completed a whirlwind review of Exchange Traded Funds worldwide here at the Inside ETFs Conference Europe. I am here to satisfy my own interest in becoming more educated, as well as to prepare for speaking on panels at ETF conferences in Boca Raton, Singapore, and Amsterdam. Learning about Exchange Traded Vehicles (ETVs) will and should never stop as the products and the financial markets in which they are used will be evolving for many years to come.

The first ETF came about in the US in 1993 under the ticker SPY, also known as the “spyder.” The spyder enabled institutional investors to purchase the entire S&P 500. This allowed the investor access to market returns, while limiting specific company risk.