ETF distribution in becoming laser focused
ETF issuers in Europe are no longer launching new products in every European market and are becoming more targeted on where to be most successful, according to a PwC report.
Fund Launches and Updates
Amundi has launched the Amundi MSCI ACWI SRI PAB UCITS ETF (WELB) on the Deutsche Boerse XETRA with a total expense ratio (TER) of 0.20%. ETF Stream
BlackRock launched the iShares Blockchain Technology UCITS ETF [BLKC] on Euronext Amsterdam, with a total expense ratio (TER) of 0.50%. Finextra
BNP Paribas Asset Management has launched the BNP Paribas Easy ESG Eurozone Biodiversity Leaders PAB UCITS ETF on Euronext Paris and Deutsche Boerse XETRA with an ongoing charges figure of 0.35%. ETF Stream
WisdomTree launched the WisdomTree Global Automotive Innovators UCITS ETF (WCAR) on Deutsche Boerse XETRA, Borsa Italiana and the London Stock Exchange with a total expense ratio of 0.45%. ETF Stream
In Canada, CI Global Asset Management launched the following three new investment products on the Toronto Stock Exchange: , the CI Global Sustainable Infrastructure Fund (CGRN), the CI Global Green Bond Fund (CGRB), and the CI Auspice Broad Commodity ETF (CCOM). The Province
Putnam Investments launched two new transparent, actively managed, equity ETFs: the Putnam BDC Income ETF PBDC and the Putnam BioRevolution ETF SYNB.
The new ETFs will join Putnam’s existing suite of four active ETFs which were launched in May 2021. VettaFi
Simplify launched the Simplify Bitcoin Strategy PLUS Income ETF (MAXI) which is the first ETF to provide exposure to bitcoin while generating income by selling short-dated options spreads.
MAXI is listed on the Nasdaq and has a gross expense ratio of 0.97%. Businesswire
Full list of U.S. launches:
CSOP Asset Management will list its third ETF on SGX – CSOP CGS-CIMB FTSE Asia Pacific Low Carbon Index ETF. Businesswire
Harvest Global Investments has launched the Harvest China Sustainable Lifestyle Tech Active ETF which is based on the Solactive China Lifestyle Tech Index. The ETF also has allocations towards ESG leaders that take action against climate change and social equality. Fund Selector Asia
ETF industry in Asia Pacific (ex-Japan) gathered record year-to-date net inflows of $83.05 billion through the end of August 2022 with $9.53 billion of inflows for the month of August, according to ETFGI data.
This is the fourteenth month of consecutive inflows. ETF Express
While markets remain choppy and investors continue to de-risk, active asset managers are bearing the brunt of the wait and see approach with outflows from open-ended funds exceeding €150bn through August, while passively managed inflows experienced inflows.
Europe-domiciled funds posted €72.8bn in net outflows to August, according to Morningstar data, excluding money market funds and funds of funds.
However, active funds bled roughly €150.5bn, while passive funds registered inflows of about €77.6bn. Financial Times
Quite sure no one is surprised by a recent PwC report stating that ETF issuers are starting to take a more targeted approach when registering their products in Europe by choosing to select markets where ETF demand exists versus adopting a region-wide distribution strategy.
The findings stem from Denmark being ranked as the top market for ETF distribution in the 12 months to the end of June, registering 256 ETFs, according to an ETF Stream article.
While that number is high, 216 of these were from just two ETF issuers – 138 from Amundi and 78 from WisdomTree – highlighting the targeted approach issuers are taking to markets. ETF Stream
Course reversal for single stock ETF filings
In the U.S., single stock ETF filings were exploding and the topic du jour.
However the appeal has fizzled fast as Kelly Intelligence, Roundhill Investments and Tema Global all withdrew their applications for almost 130 single-stock ETFs prompting suggestions that the SEC had privately told them the ETFs would not be approved.
The apparent pushback comes despite the SEC having approved leveraged and inverse single-stock ETFs in July.
The difference here is that the aforementioned products were based on US-listed companies whereas the proposed new products would not have employed leverage but aimed to improve retail access to foreign securities such as Saudi Aramco, Volkswagen and Tencent. Financial Times
UK active funds that are holding their own against passives. Financial Times
ETF issuers are betting on Italy as Europe’s next growth market. ETF Stream
Inflows into both ESG and thematic ETFs have slowed markedly this year in the European market and, in the US, in many instances, they have gone into reverse. Financial Times
ETF Files: iShares, Fidelity, Strive, and Hancock plot active ETFs. Citywire USA
ETFs had become positively labelled by some as the “cockroaches” of the investment universe, after building a reputation for operating through any emergency. Financial Times
For those of you in the US, Sage Advisory Services is currently testing a new thematic investing strategy that invests entirely in ETFs. PI Online
From behind the desk with Andrea Murray
When is a niche ETF too gimmicky for success?
This is a hard one to answer and while we all want the crystal ball into the perfect formula for a successful ETF launch, there is no recipe that always equates to the perfectly baked cake.
The FT recently highlighted the KPOP ETF launch in the US which because of the massive retail investor adoption of ETFs, seems to be ripe for unique products like a Korea pop-culture trend.
Henry Jim from Bloomberg Intelligence and I recently chatted about this trend on our What the Flow?! Bloomberg monthly series, which you can watch here.
However, it made me think of two narrow US based thematic products that launched with a lot of fanfare but crashed and burned in a short period – BITE, a restaurant- based ETF, and NASH, a Nashville themed ETF.
Memorable tickers, both had great marketing, press coverage and sales teams behind them but again, only time can tell what will send AUM to the stratosphere and what characteristics will fast track a product to the ETF graveyard.