ETFs and Funds - Articles & White Papers

For many investors, 2022 has been a year to forget. Rampant inflation, geopolitical conflict and dramatic monetary tightening have largely resulted in poor returns across asset classes. But against a challenging backdrop for 2023, we explain why we think there may be some grounds for optimism.

What’s ahead for exchange-traded funds (ETFs) globally in 2023? Jason Xavier, our Head of EMEA ETF Capital Markets, explains where he sees areas of growth and opportunity including smart-beta ETFs, income-oriented strategies, and select emerging markets.

Dina Ting, our Head of Global Index Portfolio Management, offers her perspective on the allure of multifactor US mid-capitalization strategies for 2023.

CTA claims of being superior to other forms of risk mitigation are exaggerated because (1) the past performance has been dominated by persistent long positions in bonds over a decades-long period in which interest rates declined to effectively zero, and (2) the convexity with respect to equity moves is less effective than…

Global gold ETFs registered their seventh consecutive month of net outflows in November. But outflows slowed to a relatively modest 33t (US$1.8bn), having also decelerated m-o-m in October (to -59t).

The distinct aspects of bond ETFs are becoming more important to grasp as fixed income ETF use grows.

The Global X Research Team is pleased to release the October 2022 edition of the UCITS Thematic ETF Report. The report recaps Global X’s classification system for disruptive themes and the thematic ETFs that track them. It also provides industry-level analysis of thematic investing ETFs, looking at new launches and closures…

With the Fed rapidly raising rates, ETF investors may need reminders on how to approach ETF trades on days of Fed announcements.

Gold-backed ETFs and similar products account for a significant part of the gold market, with institutional and individual investors using them to implement many of their investment strategies. Flows in ETFs often highlight short-term and long-term opinions and desires to holding gold.

I find that approximately 30% of price fluctuations in the Fama-French size and value factors are non-fundamental price pressures driven by correlated fund flows, which generate price movements that revert over time. Is this really demand-based price pressure? I show that the price effects happen exclusively in periods when…

Attempts to create charging structures that diverge from the simple percentage of assets under management model are typically focused on the use of performance-based fees, but in the vast majority of cases these (somewhat counter-intuitively) increase the negative asymmetry experienced by investors. Too often we pay lavish…

There were recently quite some discussions on social media platforms about the sense and nonsense of open-ended funds investing in illiquid assets following the gating of withdrawals from the Blackstone Real Estate Income Trust (BREIT), that was covered broadly in newspapers like Wall Street Journal and Financial Times. Some…

The U.S. stock ownership rate doubled between 1983 and 2001 but remains below predictions of some equity participation models. Consistent with calibration studies by Heaton and Lucas (2000) and Gomes and Michaelides (2005), mutual fund costs and indicators of background labor risk are significantly related to stock ownership…

The new Global Financial Integrity report, Private Investment Funds in Latin America: Money Laundering and Corruption Risks, examines the money laundering risk factors associated with these private investment funds. It analyzes the ring of actors and facilitators involved, the methods of contact used by perpetrators and the…

The European ETF industry enjoyed inflows over the course of November 2022. These inflows occurred in a positive market environment. Nevertheless, concerns about high inflation rates, increasing interest rates, market turmoil in UK government bonds, geopolitical tensions, and disrupted delivery chains caused by the still…

We study intentional herding in investment styles by mutual funds, and its consequences. We find that style herding is significant and persistent, especially for active funds. Herding tends to increase after periods of high market volatility and decrease with sentiment, consistent with the intentional character of herding.…

The Global X Research Team is pleased to release the November 2022 edition of the UCITS Thematic ETF Report. The report recaps Global X’s classification system for disruptive themes and the thematic ETFs that track them. It also provides industry-level analysis of thematic investing ETFs, looking at new launches and closures…

Alternative products with uncorrelated returns do not necessarily provide diversification benefits. Out of 10 alternative ETFs, only one product improved the Sharpe ratio of a 60/40 portfolio. Correlations should be regarded carefully in fund selection.

There are still too many people investing in active funds. Not because they are unnecessary, but because owning them comes with a unique set of behavioural challenges that we are often unprepared for. If we are to have any hope of benefitting from holding them, we must accept and embrace these. The worst – and all too common…

We analyze changes to mutual funds' self-declared benchmarks using hand-collected data from funds’ prospectuses. Under existing rules, funds can freely change their benchmark indexes and, implicitly, the historical returns to which they compare their past performance. Funds exploit this loophole by adding (dropping)…