Grayscale Breaks into European ETF Market

Grayscale Breaks into European ETF Market

A wild week in markets, but that doesn’t stop ETFs from plowing ahead with new fund launches and index changes.

A PwC survey is predicting that global ETF assets will hit $20tn by 2026, and big news in Europe as Grayscale debuts their first product on three exchanges.

Fund Launches and Updates

EMEA

21Shares has launched the 21Shares Crypto Layer 1 (LAY1) and the 21Shares DeFi 10 Infrastructure ETP (DEFI) (set for the 18th).

Both ETPs are listed on SIX with total expense ratios of 2.50%.Crypto News BTC

DWS has switched the index on the Xtrackers MSCI AC Asia ex Japan Swap UCITS ETF (XAXJ) to the MSCI AC Asia ex Japan Low Carbon SRI Leaders Capped index.

The ETF has been renamed Xtrackers MSCI AC Asia ex Japan ESG Swap UCITS ETF following the switch, keeping the same ticker and total exchange ratio of 0.65%. ETF Stream

U.S. firm Grayscale is launching its first European ETF, the Grayscale Future of Finance UCITS (GFOF), which will list on the London Stock Exchange, Borsa Italiana, and Deutsche Börse Xetra.

GFOF, in partnership with Hanetf, tracks a basket of digital asset companies, rather than a product tied to the price of Bitcoin which is interesting given the immense effort they have made in the U.S. to convert their $19bn Bitcoin Trust into an ETF. It will be interesting to see if that will be next – either here or in the States. FN London

Tabula Investment Management has added a GBP-Hedged share class of its Asia ex-Japan High Yield Corporate USD Bond ESG UCITS ETF to the London Stock Exchange (Ticker: TAGH LN). ETF Express

JP Morgan listed the JPM BetaBuilders China Aggregate Bond UCITS ETF – USD Hedged (dist) on the LSE. TER 0.28% ETF World

AMERICAS

In Canada, Horizons ETFs launched the Horizons Copper Producers Index ETF (COPP) on the Toronto Stock Exchange with a management fee of 0.65% Newswire

AllianceBernstein has filed two actively managed ETFs with the SEC which will be the firm’s first ETFs to launch since hiring Noel Archard in February.

The filings include the AB Ultra Short Income ETF and AB Tax-Aware Short Duration ETF. Citywire

Another U.S. behemoth asset manager T. Rowe Price plans to add two more active ETFs to its offering later this year.

They recently filed the T. Rowe Price Floating Rate ETF and the T. Rowe Price US High Yield ETF. Citywire

Exchange Traded Concepts has filed a global ETF that will track Korea‘s entertainment stocks called the “KPOP ETF”.

Slated to be launched in the third quarter, the KPOP ETF is designed to provide exposure to companies in the entertainment and interactive media and services industries listed on the Korean stock exchange. The Korea Herald

Fund Flows and Trading Volume

Global Gold ETF net inflows totalled 42.8t in April, lifting year-to-date inflows to 311.6t (US$19.4bn).

European funds led the way with 25.9t of inflows, followed by North American funds (17.5t).

Elevated inflation and slowing economic growth were key drivers for these flows.

Asia was the only region to see outflows in the month, driven by those within Chinese ETFs. Total AUM in these products now stands at US$238bn. World Gold Council

Noteworthy

Global ETF assets could grow to more than $20tn by 2026 based on responses from 60 ETF executives who expect the ETF market’s “phenomenal momentum” of the past five years to continue, according to PwC recent report.

Given global ETF AUM growth of 22 per cent over the past five years ending December 2020, combined with record inflows, new entrants, innovative products and distribution opportunities, we believe that a projection of over $20tn global ETF AUM by 2026 can be achieved,” the report said.

The poll also found that 45% of respondents expect over half of their 2022 product launches to be focused on ESG investing and that more than 80% expect online platforms to represent the primary source of future demand for ETFs. Financial Times

The U.S. Securities and Exchange Commission is stepping up its scrutiny of inverse and leveraged ETFs.

This comes on the heels of regulatory body, Finra, which recently asked for feedback on sales practices for “complex products” amid a surge in trading by retail investors.

In a speech delivered Wednesday, SEC chair Gary Gensler said he’d asked the commission’s divisions of investment management and examinations to ‘take a renewed and focused look at the use of derivatives,’ in leveraged and inverse ETFs as well as those linked to a volatility index. Citywire

Additional reads

21Shares, Valour, and Van Eck temporarily halt Terra ETP creations and redemptions. SwissInfo.CH

Bitcoin ETFs arrive in Australia just as Crypto market tanks. Bloomberg

Grayscale holds private meeting with SEC Discussing Bitcoin Spot ETF Transition. Crypto Potato

BlackRock has given itself a pass on the knotty issue of climate change. Financial Times

Citigroup, BNY Mellon and Wells Fargo have joined a funding round for Talos, a US developer of crypto trading technology, highlighting the work now being done on Wall Street to prepare for the growing adoption of digital assets. Financial Times