Hedging fever reaches new highs

This report aggregates newly launched funds in November and highlights the performance of the funds launched in October.

• 48 funds were launched in November, primarily investing in equities
• 22 new funds were launched in both the Americas and Europe; APAC saw four new listings
• A quarter of new listings utilised a currency hedging strategy

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November new listings

Cross border investing continued to drive new ETF issuances in November, as 37 of the 48 funds listed over the month had some element of cross border investment. This trend reflects both a general saturation among "plain vanilla" domestic funds as well as the runaway success garnered by some internationally focused funds over the last year.

These new listings also look to play on the expected impact of central bank policy divergence across the world as the US looks set to start raising interest rated for the first time since the financial crisis. To this end, 12 of the 28 newly listed funds had an element of hedging in order to protect investors from fluctuations in either interest or foreign exchange rates.

Even Apac funds, which traditionally focus on single border investing took to the cross border trend as the two new funds form Fubon Asset Management invest in Japanese equities with both a leveraged and inverse Topix fund.

October flows

The funds launched in October have gained $176m in total assets since their inception.

The US added 19 funds during the month of October that have seen a total of $146m in new assets since their launch. The majority of the inflows went to the PowerShares DWA Tactical Sector Rotation Portfolio ETF (DWTR) which gained $92m in inflows over the past two months.

The seven funds launched in Europe during October combined for an outflow of $62m. The only fund to see positive asset flows has been the Source S&P 500 UCITS ETF (SPXD). The fund gained $71m in new assets since it launched in late October.

Apac also added seven funds back in October which managed to earn a combined $93m in inflows since their inception. The biggest earner was the iShares Topix ETF (1475) which is listed on the Tokyo Stock Exchange and saw inflows of $51m

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James Hohors, ETF Analyst, Markit
Tel: +1 646 679 3012
james.hohorst@markit.com

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.