First Bridge ETF landscape and risk report: January 2014 (Part 1 of 7)
ETP assets in the U.S. fell to $1.64 trillion as of January 31, 2014, due to outflows and market declines. Equity ETFs saw total assets decline by $60.9 billion while bond ETFs saw assets increase by $2.9 billion.
The year 2013 was a historically bad year for the yen, so hedging against a falling yen was a very effective strategy. That trend has reversed in 2014 YTD, with an appreciating yen. However, investors in emerging market equities may want to consider currency-hedged ETFs if those currencies continue to depreciate versus the USD in 2014.
A total of 25 new ETFs were launched in January 2014 in the U.S. ETF sponsors are focusing on higher value ETFs in the 50–85 bps expense ratio range that offer active management or targeted strategies such as currency hedging or factor exposure.
An analysis of sub-scale ETFs in the U.S. shows that a vast majority of them are in the inverse/leveraged, currency, commodity, and quantitative strategy categories.
A complete ETF list is available at FirstBridge.
Browse this series on Market Realist:
- Part 2 - Investors are anticipating increased volatility in equity markets
- Part 3 - An overview of some of the ETFs designed to manage volatility
- Part 4 - Currency-hedged ETFs: Focus shifts to emerging markets
- Investment & Company Information