Risks continued to ease in the fourth quarter of 2012, with no signs of a reversal ahead, according to risk specialists Axioma. Melissa Brown, Senior Director of Applied Research at Axioma, said: “The decline in risk should give investors the opportunity to focus on achieving active returns.” With predicted risk considerably reduced, now could be the time for risk tolerant sophisticated investors to consider tactically adding a degree of leverage to their portfolios via leveraged exchange-traded funds (ETFs) offering geared exposure to various markets.

Toronto-based Horizons ETFs and its affiliate AlphaPro Management have added the Horizons Active S&P/TSX 60 Index Covered Call ETF (HAX) to their growing line-up of active covered call exchange-traded funds (ETFs). This latest fund, which uses a covered call options strategy on stocks within the S&P/TSX 60 Index, aims to provide investors with exposure to Canadian large-caps with mitigated downside risk and monthly distributions of dividend and call option income.

Stoxx, a leading index provider, has announced the launch of the iSTOXX Efficient Capital Managed Futures 20 Index, a new index based on research provided by Efficient Capital Management, a global leader in the Managed Futures industry. The index, which measures the performance of some of the world’s largest Commodity Trading Advisors (CTAs), has potential uses as a benchmark against a single CTA or pool of CTAs, or as an underlying for financial products such as synthetic exchange-traded funds.

The ProShares Merger ETF (MRGR), an innovative new fund from US-based alternative exchange-traded fund (ETF) specialist ProShares, is scheduled to list on the BATS Exchange on 13 December. The fund is designed to track the performance of the recently launched S&P Merger Arbitrage Index, a risk arbitrage strategy that exploits commonly observed price changes associated with a global selection of publicly announced mergers, acquisitions or other corporate reorganisations.

Reflecting the current popularity of low-volatility investment products, the Chicago Board Options Exchange (CBOE) has introduced the CBOE Low Volatility Index (LOVOL), a new benchmark index designed for investors seeking more stable returns. The CBOE has built up a strong franchise in the volatility space and, within the world of indexing, is best known for the closely-watched CBOE Volatility Index (VIX), Wall Street’s so-called ‘Fear Gauge’, which underlies a number of exchange-traded products.

Invesco PowerShares, a leading global provider of exchange-traded funds (ETFs), has unveiled plans to launch the PowerShares S&P 500 Downside Hedged Portfolio ETF (PHDG), benchmarked to the S&P 500 Dynamic VEQTOR Index. The actively managed fund aims to deliver positive total returns in rising or falling markets that are not directly correlated to broad market returns. It seeks to achieve this objective by dynamically allocating long-only exposure between the S&P 500, S&P VIX Short-Term Futures, and cash.

Market Vectors Index Solutions, a boutique provider of financial market indices, has introduced the Market Vectors Hedge Fund Beta Indices, a set of four regional and two global indices offering exposure to hedge fund beta. Each index seeks to capture the systematic returns, known in the industry as ‘beta’, of hedge funds with similar investment styles that invest in the same asset classes and same geographic markets.

IndexIQ, a leading US-based provider of alternative index-based exchange-traded funds (ETFs), has announced the launch of the IQ Hedge Market Neutral Tracker ETF (QMN). The latest addition to the firm’s hedge fund replication ETF family, QMN tracks the IQ Hedge Market Neutral Index, a proprietary index designed to offer investors liquid and transparent market neutral hedge fund exposure, by investing in a range of ETFs.

Despite the European debt crisis, slowing growth in China and the coming US elections, investors who are able to look past the latest headlines and focus on the long term will be rewarded over time, according to a report from BNY Mellon Wealth Management. “Investors can’t afford to be paralysed by turbulence and uncertainty in the global markets,” said Leo Grohowski, chief investment officer of BNY Mellon Wealth Management.

AdvisorShares, a US sponsor of actively managed ETFs, has announced the launch of the AdvisorShares QAM Equity Hedge ETF (QEH). Listed on the NYSE Arca, QEH aims to provide investors with superior risk-adjusted returns versus the S&P 500 Index by investing in a portfolio of ETFs which echo the style and underlying allocations of the HFRI Equity Hedge (Total) Index. Essentially, QEH offers a form of hedge fund exposure without the requisite time and expertise needed to select individual hedge funds.