News

ETFs getting even

Equity exchange-traded funds (ETFs) are often used as a way of achieving instant diversification as they enable you to buy a large basket of stocks as opposed to shares in a single company. In reality these ETFs aren’t as diversified as you might think because they weight stocks according to their market capitalisation. This has led to...
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Play major stock markets

There are almost 1,200 ETFs listed on the London Stock Exchange and between them they provide exposure to a wide range of different markets. To get the best returns you will need to pick the right indices, but it is a difficult decision when there are so many to choose from. According to FE Trustnet, there are 48 London-listed ETFs...
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Trackers vs ETFs

The recent price war in the exchange-traded fund (ETF) industry is blurring the lines between ETFs and trackers, but there are important differences between the two investment vehicles. Trackers and ETFs are open-ended, passive investments which follow the movement of an index like the FTSE 100 or S&P 500. Each of the world’s...
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Sovereign wealth generators

Sovereign or government bonds are seen as safe and predictable investments but a bull run in this asset class over the past two decades or more means the yields on offer are close to rock bottom. You have three main options when you invest in a government bond: you can buy an actively managed fund; you can (in some cases) invest...
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Get currency protection

Currency movements can often seem like a macroeconomic issue that has little relevance to the man on the street, but they can have a hugely negative effect on your investment returns. If you invest in exchange-traded funds (ETFs) with international equity or fixed income exposure it could pay to choose a currency-hedged version. In...
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Play the US energy boom

Master limited partnerships, or MLPs, offer investors an appealing mix of high yields, low volatility and exposure to the rapidly expanding US energy market. Many investors in the US like to own MLP units directly but in the UK you can get access via two London-listed exchange-traded funds (ETFs). Although energy market chat has been...
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The most popular choices

Exchange-traded funds (ETFs) are moving into the mainstream. According to the latest data from specialist consultant ETFGI, assets in the wider exchange-traded products (ETPs) space hit a new record of $2.99 trillion at the end of April – just short of the $3 trillion milestone. The popularity of the low-cost tracking product means...
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The commodities comeback

After years of poor returns the outlook for commodities is becoming more positive, making it an opportune time to invest in the asset class while prices are still low. Commodities have had the weakest returns of any asset class in the past four years but there are several encouraging signs which suggest they could be at a turning...
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Timing is everything

A key characteristic that sets exchange-traded funds (ETFs) apart from mutual funds is the ability to trade them intraday, but the poor infrastructure of some investment platforms means this benefit is often being lost. The big difference between ETFs and mutual funds is ETFs trade on the stock exchange just like ordinary shares. In...
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Strike it rich with oil ETCs

Investors have been piling money into oil exchange-traded commodity (ETC) products in the hopes the collapse in the oil price since summer 2014 will be unsustainable in the long term. ETF Securities has seen nearly $1 billion of money flow into its oil ETCs since the start of 2015 and says it has been ‘inundated’ by calls from people...
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Finding quality through ETFs

Exchange traded funds (ETFs) which invest in quality growth stocks seem a good bet for investors who want to grow their money over the long term, but the different methods used to determine quality means choosing between products is far from easy. Quality factor ETFs have emerged as part of the trend towards ‘smart beta’ products,...
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Exploit the market via ETPs

Sophisticated investors who want to take advantage of short-term market opportunities are increasingly using short and leverage exchange traded products (ETPs) to carry out their trading activities. Launched in 2005 there are now over 200 short and leverage ETPs listed on the London Stock Exchange. You can get exposure to the major...
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Closet trackers uncovered

Investors are being urged to look at funds’ ‘active share’ alongside other measures when assessing their potential for outperformance following research claiming fund managers are swindling people out of fees. Active share was defined by Yale Professors Martijn Cremers and Antti Petajisto in 2009 as ‘the fraction of a portfolio or...
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