In mid-January, the US Commodity Futures Trading Commission (CFTC) unveiled a rule-making proposal to restrict positions in energy derivatives. The regulatory body is allowing market players around three months to comment on the proposal to limit contracts on gas and oil.
ETF providers are among the large number of interested parties who could be impacted by developments in this area. As Helen Fowler discusses in the cover feature, one possible result of the proposal – if it becomes law – is providers of certain ETFs will likely be pushed into the swap market. With the potential for position limits to be set in the precious metals markets, such as silver and gold, players in the ETF industry will be closely watching this space for the next few months at least.
Aside from regulatory scrutiny, the year ahead bodes well for the ETF industry. Last year saw global assets hit record highs at the end of December, rising past one trillion dollars. This year, estimates suggest exchange-traded product assets in the US and Europe will surpass the $1.2trn level if markets remain flat, and may even hit $1.4trn, according to research by Deutsche Bank.
Issuers continue to build up product ranges in developing regions, with the Asian and Latin American domestic ETF markets set to expand. Industry players are suggesting fixed income and equities will remain the most popular asset classes in terms of assets under management, although ETFs tracking commodities continue to see strong interest from investors across different geographical areas. In this edition, a panel of industry experts looks at the commodities sector and how ETFs and ETCs can be used to effectively tap this asset class.
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