Today's listings
Italy
iShares will be listing a new ETF into Milan, targeting small and medium cap Italian companies. IPIR, like other PIR funds, is intended to be compliant with the new personal savings plan (PIR) introduced in Italy this year. The PIR tax discount was introduced by the Italian government to incentivise Italians to invest in small Italian companies.
USA
Leveraged ETF specialist Direxion will be listing a new 3x leveraged ETF, which takes a bullish outlook on emerging market bonds. EMBU, which will list in New York, will give 300% of the daily performance of the JP Morgan Custom Emerging Markets Bond Index.
Korea
Mirae Asset Daewoo, the largest Korean investment bank, is listing two new ETFs in Korea that track American loans. Both 520021 and 520020 track the S&P/LSTA U.S. Leveraged Loan 100 Index, which is designed to reflect the performance of the largest facilities in the leveraged loan market. There is a fee difference between these two products but that is the only difference I can currently identify. There is very little English language material available on the new products at the moment, and even google translate is struggling to enable me to differentiate between these two products, I will investigate further.
Today's news from around the web
ETFs long term performance in question
ETFs have underperformed active managers over the long term, new research suggests. ETFs tend to be heavy on large cap companies, which are outperformed by mid-cap and small caps on a decades long basis. Active managers, by contrast, tend to put more weight on smaller cap companies, meaning that while they might fail to beat the index short term, they still beat passive management long term.
Remember how index trackers died in the dot com boom
Index trackers made the dot com boom worse because they forced more momentum into overvalued tech stocks. Sadly, this lesson has been forgotten in today's rush into ETFs. Investing in the Nasdaq 100 would be barred under UCITS rules because it has 41% of its value in Apple, Google, Microsoft, Amazon and Facebook. Yet in the US, PowerShares Nasdaq tracker is one of the most popular ETFs.
Investors return to EM
Emerging market stocks and bonds are back in fashion, suggesting the wheel has turned full circle. "Asset allocators are increasingly bullish on emerging markets stocks, a view that makes sense with the MSCI Emerging Markets Index up more than 26 percent year to date, or more than double the almost 12 percent returned by the S&P 500."
