ETFS A ROUTE INTO NEW MARKETS
According to a report from Blackrock, exchange traded funds (ETF) and products based on emerging market equities are seeing particularly impressive growth. At the end of August 2010, there were 450 ETFs providing exposure to emerging market indices with 869 listings, holding assets of $193.5bn (£122.4bn). In the year to date, emerging market ETFs have had net inflows of $24.8bn. Investors can now get exposure to every MSCI emerging market country using ETFs except for the Czech Republic and Morocco.
REPORTING STATUS GRANTED
The Source Physical Gold exchange traded commodity product (SGLD), which tracks the spot gold price and is secured by gold bullion held by JPMorgan Chase in London, is now confirmed to qualify for reporting status instead of distributor status. That means that the product will now qualify for capital gains status for the purposes of UK taxpayers. The product is traded in US dollars on the London stock exchange and the SIX Swiss exchange. It has raised over $700m in total assets since launching in June 2009.
NEW HSBC PRODUCTS
HSBC is planning to unveil swap-based ETFs next year so as to widen the range of investments offered. HSBC currently offers 11 ETFs on European exchanges, all of which physically replicate their underlying assets. According to Farley Thomas, head of ETFs at HSBC, the bank hopes to take advantage of HSBC’s research capabilities to create more thematic products. The expansion will not take place until late 2011, however, because of ongoing concerns about the regulation of derivative based products, and the bank will continue to focus on physical ETFs.