With the end of 2017 fast approaching, exchange traded fund investors should already be prepping for 2018.
On the upcoming webcast (available live and on demand for CE Credit), ETF Top Trends and Insights for 2018, Salvatore Bruno, Chief Investment Officer and Managing Director for IndexIQ, Mark Lacuesta, Director of Index Strategies for IndexIQ, and Kelly Ye, Director and Fixed Income Research Analyst for New York Life Investments, will review recent trends and outline potential market risks and opportunities that investors should be keeping an eye on for the New Year.
For example, while bond investors may still need a stable source of income-generating ideas, investors will have to look out for a rising interest rate environment and consider the risks in a prolonged bull market environment.
Consequently, investors may turn to alternative fixed-income ideas. The MacKay Shields Municipal Intermediate ETF (NYSE Arca: MMIT) and the IQ MacKay Shields Municipal Insured ETF (NYSE Arca: MMIN) are two new actively managed muni bond strategies that could better help investors navigate changing market conditions. MMIT invests primarily in investment grade municipal bonds. MMIN principally invests in investment-grade municipal bonds covered by an insurance policy guaranteeing the payment of principal and interest.
Both ETFs joined a growing family of fixed income ETF offerings from IndexIQ, including three first-of-their-kind factor-based fixed income offerings: the IQ Enhanced Core Bond U.S. ETF (NYSE Arca: AGGE) and IQ Enhanced Core Plus Bond U.S. ETF (NYSE Arca: AGGP), which were launched in May of 2016, and the IQ S&P High Yield Low Volatility Bond ETF (HYLV), the first high yield low volatility fixed income ETF, which launched in February of 2017.
Furthermore, after the recent pullback in the U.S. dollar this year and heightened valuations in U.S. equities, more have turned to international markets to capture potential opportunities abroad. Potential investors still face currency risks if the greenback strengthens or foreign currencies depreciate but these foreign currency fluctuations are hard to predict.
ETF investors interested in foreign market exposure and in taking a more neutral view on foreign currency movements can consider a handful of 50% hedged/50% unhedged options, including the IQ 50 Percent Hedged FTSE International ETF (NYSEArca: HFXI), IQ 50 Percent Hedged FTSE Europe ETF (NYSEArca: HFXE) and IQ 50 Percent Hedged FTSE Japan ETF (NYS Arca: HFXJ). All three funds have approximately half their currency exposure of the securities in the underlying index hedged against the U.S. dollar on a monthly basis.
Financial advisors who are interested in learning more about trends and insights to look for in 2018 can register for the Tuesday, December 12 webcast here.