Global markets experiencing a rough patch
Global markets experienced a rough patch after following excitement that markets were back in positive territory for the year. European markets saw a decrease in the FTSE 100 of -5.76%, the FTSE 250 -6.30%, Stoxx Europe 600 -5.63% and the DAX -6.99%. U.S. equities were down -4.73% for the same period.
The VIX index climbed +11.57% for the week and closed Friday at 36.09.
WTI Crude oil contracts closed on Friday at $36.26 a barrel, down -8.32% for the week. This was the biggest drop in six weeks as the selloff in stocks raised more fears about the demand outlook, combined with record-high U.S. inventories.
ETF Launches and Updates
ETC Group is planning to list the world’s first centrally cleared Bitcoin Exchange Traded Cryptocurrency, Bitcoin Exchange Traded Crypto – (BTCE), on Deutsche Börse’s XETRA platform later this month.
The ETC tracks the price of Bitcoin and is physically backed. This is the first cryptocurrency product to launch on XETRA, the inaugural ETP from ETC Group and the first cryptocurrency ETC to be available through HANetf’s white label ETP platform.
Leverage Shares, launched 28 new short and leveraged ETPs based on heavily traded US stocks ranging from tech giants, such as Apple, Microsoft and Google, to consumer discretionary blockbusters like Netflix, Amazon and Tesla. All 28 of the ETPs are available on London Stock Exchange and have a TER of 75bps.
Flows and Performance
The World Gold Council reported that in the last five months, gold-backed ETF inflows have outpaced records for any whole calendar year, hitting record AUM highs of $195 billion. European funds added $2.4 billion, which was led by UK-based funds.
Adam Perlaky, Investment Research, at the World Gold Council, says: “Gold ETFs saw inflows on all but two trading days over the past two months, underscoring that investors are embracing gold in both risk-on and risk-off environments.
Drivers behind the inflows into gold include lingering uncertainty as to the economic and social impact of COVID-19, as most economies remain shut down or are slowly reopening. Source: ETF Express
Lyxor Green Bond (DR) UCITS ETF passed EUR300m in AUM making it the world’s biggest green bond ETFs in terms of AUM.
Launched in February 2017 and tracking the Solactive Green Bond EUR USD IG index, the Lyxor Green Bond ETF invests in investment-grade green bonds denominated in euros and US dollars.
ETF Express recently reported that ESG ETFs raised EUR 1 billion in Europe when the markets bottomed in March and had attracted more than EUR 10 billion by the end of May.
ETF investors continued to pile into airline stocks with the U.S. Global Jets ETF for an amazing 70-day streak.
Newly minted day traders and “bored” millennials have poured money into the ETF as airlines rebound following reopening and eased shelter-in-place guidelines.
Bloomberg’s Eric Balchunas reported that the JETS ETF ‘finally’ saw outflows last week, ending the 70 day inflow that spanned 3.5 months and added up to $1.2b. JETS YTD is down -42.04%.
In a similar vein, the newly launched Roundhill Sports Betting & iGaming ETF (BETZ) saw impressive trading volume within the first week of its launch on 4 June. On its first day of trading alone, BETZ saw more than $17 million in shares traded, while on its second day, $50 million worth of shares exchanged hands.
BETZ reached $70.24 million in AUM, as of Friday.
With an expense ratio of 75bps, the firm attests that the volume and asset growth stem from three reasons: more at home investors spending time tracking the markets; increased legalization of sports betting around the U.S.; and the rise of commission-free trading of ETFs via the Robinhood online investment platform.
Fund Performance and Flows
Top 3 Best Weekly Performers in the UK
WisdomTree Brent Crude Oil 1x Daily Short +7.84%
WisdomTree FTSE 250 1x Daily Short +6.62%
WisdomeTree FTSE 100 1x Daily Short +6.34%
Top 3 Worst Weekly Performers in the UK
Lyxor S&P 500 Banks UCITS ETF -12.98%
Lyxor MSCI World Energy TR UCITS ETF – Acc (USD) -11.62%
iShares Edge MSCI USA Value Factor UCITS ETF (Dist) -11.01%
Top 3 Weekly UK Inflows
iShares Global Corp Bond ETF $321.5m
iShares Core EURO Corp Bond UCITS ETF EUR (Acc) $202m
WidomTree Long JPY Short GBP $90.3m
Top 3 Weekly UK Outflows
iShares Treasury Bond 1-1yr UCITS ETF USD Acc -$161.9m
Xtrackers Physical Gold ETC -$112.1m
Lyxor S&P 500 UCITS ETF – Dist (USD) -$111.2m
Data sourced from ETFLogic