Two solutions for volatility



While markets remained volatile through the first quarter of 2019, the two ETF Securities’ funds which invested in global infrastructure and US high yield remained resilient, the firm said.
The ETF Securities US high yield (ZYUS), which returned approximately 20 per cent over the last 12 months, was helped by the US economy moving into the late-stage of the business cycle, typically characterised by slowing growth and corporate earnings against a backdrop of central bank tightening.
According to the firm, in this phase defensive sectors and value stocks tended to outperform as growth expectations were tapered.
ZYUS had a low volatility filter along with a yield tilt heavily biasing the portfolio towards defensive sectors, overweight property and utilities and underweight IT and healthcare.
At the same time, the global infrastructure offered stable growth over the long-term, with infrastructure assets having more predictable cash flows and earnings. Also, infrastructure historically performed as a defensive investment due to a long-time horizons and high barriers to entry reducing competition.
CORE allowed investors to remain in global equities but at the most defensive end of the spectrum, with 12-month product yield at 2.49 per cent, the firm said.
Recommended for you
With wealth managers and advisers having minimal capacity for fund research, a BNY report has found simple alternatives strategies from established providers are those which resonate best with that audience.
Platinum Asset Management has seen its third major client withdrawal this year, flagging a large client will redeem $580 million by November.
ETF provider BlackRock has redefined its underlying investment strategy for the iShares Future Tech Innovators ETF and almost halved the management fees as it continues its local iShares product suite review.
Natixis affiliate IML has launched an active ETF aimed at retirees and income-focused investors, while Loftus Peak has unveiled a hedged version of its Global Disruption ETF.