ETF Thought Leadership Center

Published on by on November 9, 2012 | Updated December 19, 2014

As the ETF industry has moved from a closet industry to the investing mainstream, the products and strategies available through the exchange-traded wrapper have become increasingly advanced. This resource is intended to provide financial advisors and individual investors with the latest research and analysis from the organizations who know ETFs best–the issuers themselves. The documents presented here include detailed investment theses, actionable ideas, and educational materials that shed light on the nuances of ETFs and potentially inspire portfolio strategies.

To submit a piece for consideration in the ETF Thought Leadership Center, please email michael.johnston@etfdb.com.

WisdomTree ETFs: Japan Hedged Equity Fund

Though the ETF industry has certainly opened the doors for investors looking to gain access to hundreds of countries across the globe, one particular powerhouse nation continues to be one of the most compelling investments out there; Japan. Although there are many exchange-traded products that offer exposure to this country, most do not consider one critical factor that can make a significant impact on bottom line returns: currency fluctuations. In this publication, WisdomTree makes a case for its Japan Hedged Equity Fund (DXJ), highlighting the products’ ability to more fully access the return potential of Japanese equities in a weakening yen environment. 

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Assessing Concentration Risk In Individual Countries

With the evolution of the ETF industry cracking the investing world wide open, average investors can now get cheap and easy access to nearly every corner of the market. Whether it be a plain-vanilla S&P 500 fund or a hedge fund replicating ETF, the possibilities are endless for investors looking to fine tune their portfolios. Of the recent innovations, single-country ETFs have gained tremendous popularity among those wishing to establish tactical tilts towards certain areas of the world. This research publication from Vanguard, however, warns investors that these hyper-targeted products can often suffer from high levels of concentration and gives investors several suggestions on how to mitigate this risk.

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A Case For Tilted Indexing

Tilt investing is by no means a new concept for investors, as many have used this innovative strategy to improve risk-adjusted returns. The approach involves systematically embracing certain anomalies that exist in the market, and harnessing their potential to outperform the broad-based market over extended periods of time. In this publication, FlexShares makes its case for tilt indexing, and describes how investors can use ETFs as a cost-effective and efficient means of applying this strategy.

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The Case For Small Cap Earnings

While there are numerous approaches investors can take to the equity universe, often times it is difficult to identify those investments that maintain a suitable balance between maximizing compelling returns and an acceptable level of risk. Small cap equities are known for being one of the most volatile and unstable segments of the market, but a close look at a niche corner of small cap investing suggests that there may be a way for investors to find the perfect balance. In this case study, WisdomTree delves into the world of low P/E small cap stocks, highlighting the sub-sectors long-run performance.

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Investment Strategies

Longer-Term Strategies for Geared ETFs

Geared exchange-traded products – better known as leveraged and inverse ETFs – have certainly had their fair share of investor attention, but not always in the best light. These products are generally considered to be used only as short-term tactical tools, as volatile prices swings make it difficult for investors to capture amplified returns over a longer time frame. ETF issuer ProShares, however, outlines two compelling strategies for those looking to invest in geared ETFs  for an extended period of time.

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Fixed Income In Focus

Commodities In A Portfolio

The rapid development of the ETF industry has essentially democratization the world of commodity investing, providing investors cheap and easy access to a previously hard-to-reach asset class. There are multiple ETF options available designed to offer investors access to this corner of the market, with options ranging from single-commodity products to more broad-based funds that offer exposure to the entire space. In this piece, Teucrium explains what “commodities bring to the table”.

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Commodity Central