ETFs OVERTAKING MUTUAL FUNDS UCITS
A quiet week for global ETF launches and flow reporting. In Europe, ETF growth outpaces that of EU-domiciled UCITS.
Fund Launches and Updates
EMEA
21Shares has launched the 21Shares Short Ethereum ETP (SHETH) and 21Shares Ethereum Core ETP (CETH) on the SIX Swiss Exchange. Total expense ratios are 2.5% and 0.21%, respectively. ETF Stream
Valour Inc. has announced its intention to launch the Carbon Neutral Bitcoin ETP on Deutsche Börse XETRA, TER is 1.49%. Blockchain News
THE AMERICAS
In Canada, Harvest Portfolios Group launched the Harvest ESG Equity Income Index ETF on the TSX under ticker symbol HESG. Financial Post
Purpose Investments has listed the Purpose Cash Management Fund (MNY CN) on the Toronto Stock Exchange with a management fee of 0.20%. ETF Strategy
In the U.S., Strive Asset Management has debuted its second ETF, the Strive 500 ETF (STRV), alongside open letters to Apple and Disney asking the giant US companies to focus on their bottom lines and not what it deems to be ESG factors. Citywire USA
Full list of U.S. launches:
ASIA-PACIFIC
Solactive recently announced their expanded engagement with leading Australian fund manager, BetaShares, by choosing the Solactive Global Royalties Index for its new BetaShares Global Royalty ETF.
The BetaShares Global Royalty ETF (ROYL) started trading on the ASX. Mondovisione
Flows
European ETF growth has outpaced UCITS growth by more than double over the past ten years, according to a new report from PwC Luxembourg.
In the group’s annual European ETF Listing and Distribution research, EU-domiciled ETFs have grown at a compound annual growth rate of 18.7%, compared to 9% for EU-domiciled UCITS between 2012 and June 2022.
Close to 26% of ETFs in the report are ESG ETFs, classified as Article 8 or Article 9 products and 214 out of 421 EU-domiciled ETFs listed during the past 12 months are ESG ETFs. Investment Week
The $31.3 billion iShares iBoxx $ Investment Grade Corporate Bond ETF (ticker LQD) slid to its lowest level since May 2010 shedding nearly $800 million in outflows.
Market volatility is hitting riskier debt as well as $600 million exited the $11 billion iShares iBoxx High Yield Corporate Bond ETF (HYG) last Thursday, bringing year-to-date outflows to $8 billion. Bloomberg
Noteworthy
European Central Banks Increase ETF Allocations
Central banks including the Bank of Finland, the National Bank of Austria, the National Bank of Slovakia and the Bank of Latvia have increased their allocation to ETFs over the past year, according to a recent article by ETF Stream.
Main points of contacts at the banks cited benefits that those of us in the ETF ecosystem have been aware of for a while: operational simplicity, ease of trading, liquidity benefits, transparency and low cost.
Raivo Vanags, from the Bank of Latvia, said it had built up its position gradually over 2021, upping its exposure to emerging market debt and equities.
Vanags cited: “one of the reasons for using ETFs in these markets is the operational complexity of opening separate accounts at custodians for each market if using segregated accounts or investing in-house”. ETF Stream
Major U.S. exchange expands into crypto space
Nasdaq is expanding into the crypto market in a fresh sign that the world’s biggest financial institutions have not been deterred from the crash in digital asset prices.
The US exchanges operator said that it was launching a digital assets services business that would begin with custody of crypto tokens for institutional investors and is also considering rolling out trading of digital assets. Financial Times
Additional reads
21Shares and Valour offer cash tender for terra ETP investors. ETF Stream
After previously announcing a zero-commission for share dealing, CAPEX.com has unveiled the final product – CAPEX Invest which allows clients to invest in 5000+ US, EU, and UK-listed securities and over 130 ETFs. PR Newswire
Only 25% of thematic funds are successful, research shows. Financial Times
Ark Investment Management chief executive Cathie Wood has stepped down as portfolio manager of the company’s two index funds. Financial Times
Trackinsight launches ETF website in collaboration with the NYSE. Businesswire
ETF investors are a barometer of what not to buy. Financial Times
Gatekeepers at Charles Schwab have added a range of 40 active ETFs to their recommended list and are gearing ups to boost their alternative offering too. Citywire USA
3iQ Digital Asset Management is partnering with Coinbase and Tetra Trust Company to expand the digital asset ETP ecosystem in Canada. Yahoo Finance
From behind the desk with Andrea Murray
There is a first time for everything even in the ETF world.
Vanguard joins the growing list of ETF issuers that make the decision to clean house by putting the $39.7 million Vanguard U.S. Liquidity Factor ETF (ticker VFLQ) on the chopping block.
That’s actually not a shameful AUM size, but perhaps for a behemoth like Vanguard this apparent misfit has to go.
Also, it’s a good thing. Gone are the days long ago when there was drama around an announcement like this.
It’s beneficial to the industry to assess which products need to be culled. 91 US-listed ETFs have shuttered so far this year compared with just 71 closures for all of 2021, according to Bloomberg.
Just like the dusty items in Grandmom’s attic, there is a positive in tossing, keeping, or bringing that ‘gem’ to the Antiques Roadshow.
Early retirement anyone?
