How to guide to enter the European ETF market
Blackwater has produced a new ebook on How to Enter the European ETF market.
Normally this info would form part of Blackwater’s consulting services, but they we are giving it out for free to anyone who is interested in entering the space.
So, if this is you or you know of somebody where it might be of interest, then just drop Blackwater a note and we will send it on.
REMEMBER at BLACKWATER are 100% INDEPENDENT, so everything disclosed is an honest assessment of the market
It’s 54 pages long and includes:
* The European ETF Landscape
* How Europe differs to the US
* Why have ETFs been successful in Europe
* How to enter the market
* How are ETFs distributed in Europe
* Growth opportunities for ETFs in Europe
Fund Launches and Updates
DeFi Technologies Inc. has announced the upcoming launch of an exchange-traded product (ETP) based on Ripple’s XRP, expanding its suite of digital asset investment offerings. The ETP is slated to debut in early December 2023 on a European exchange through Valour Inc., DeFi’s subsidiary. link
BlackRock has unveiled direct Financial Information eXchange (FIX) connectivity for authorised participants (APs), boosting the efficiency of the creation-redemption process.
FIX will allow APs to automate and scale their primary market order processes, allowing creation and redemption to take place “faster, more frequently and across more ETFs” while reducing operational costs and risks across the market. BlackRock’s FIX connectivity will be available across all asset classes, excluding commodities in the US, and will initially include UCITS and US 40Act ETF. link
Invesco has launched free ETF trading in partnership with fintech Neon. As of 19 October, the Invesco All-World Ucits ETF and Invesco MSCI World ESG Climate Paris Aligned Ucits ETF are now tradable for free on the Neon platform. Invesco said it is the first provider in Switzerland to offer investors free ETF trading. link
DWS has launched the Xtrackers Physical Carbon EUA ETC Security (XEAL), a physical carbon exchange-traded commodity (ETC) that tracks the spot price performance of EU carbon emissions.
Listed on the Deutsche Boerse, XEAL features a total expense ratio of 0.79%. The spot price for the ETC is determined by the European Energy Exchange and is physically backed by holding emission certificates. link
Also DWS, has launched a suite of target-maturity fixed income ETFs in Europe built around euro-denominated corporate bonds.
Unlike conventional fixed income ETFs, which trade in and out of bonds to maintain a broadly static duration exposure, target-maturity ETFs acquire a portfolio of bonds with maturity dates in line with the target year and hold them until maturity, at which point the ETF liquidates.
Listed on Deutsche Börse Xetra, DWS’s new suite consists of four ETFs targeting the maturity years of 2027, 2029, 2031, and 2033. The suite of funds, each of which comes with a management fee of 0.12%. link
First Trust has expanded its target outcome suite with the launch of a second active S&P 500 buffer ETF. The First Trust Cboe Vest U.S. Equity Moderate Buffer UCITS ETF – November (GNOV) is listed on the London Stock Exchange with a total expense ratio (TER) of 0.85%.
GNOV becomes the second launch in First Trust’s UCITS target outcome suite with one ETF set to be added to the range each quarter. link
A quiet week state side with more people focused on turkey dinners than launching ETFs.
Tema ETFs has launched a new ETF that tracks popular drugmakers like Novo Nordisk (NOVOb.CO) and Eli Lilly (LLY.N), aiming to tap into growing demand for their weight-loss and diabetes drugs. The Tema Cardiovascular & Metabolic ETF (HRTS.O) invests in companies tackling diabetes, obesity and cardiovascular diseases, has a TER of 0.75% and lists on the Nasdaq. link
First Trust Advisors (FTA) has converted the First Trust Dynamic Europe Equity Income Fund (FDEU) into the First Trust Active Global Quality Income ETF (NYSE Arca: AGQI). The actively managed ETF begins trading on the NYSE Arca. FTA will manage the fund, while Janus Henderson Investors will subadvise. link
Australia’s Macquarie Asset Management has rolled out its first actively managed exchange-traded funds to compete with a growing number of global managers that have also listed active ETFs in the market.
The Macquarie Dynamic Bond Active, Macquarie Income Opportunities Active and Macquarie Walter Scott Global Equity Active ETFs were listed on the Australian Securities Exchange on Wednesday. link
Our newest podcast where we explore the stories behind companies who have achieved success in the ETF ecosystem, trying to uncover what led to that success. Click HERE to listen.
A State Street Global Advisors exchange traded fund has attracted more than €1bn in net inflows in less than a month, after the US asset manager announced a massive fee cut.
The firm said on October 23 that it would slash the total expense ratio of its Dublin-domiciled SPDR S&P 500 Ucits ETF from 0.09 per cent to 0.03 per cent. The fee cut came into effect at the beginning of November.
SSGA said at the time that the reduction in the annual charges of the ETF as well as on its SPDR S&P 500 ESG Leaders Ucits ETF would make them the cheapest physically replicating European ETFs to track the US blue-chip index. Morningstar data showing that the SPDR S&P 500 Ucits ETF garnered €1.1bn between the date of the fee cut announcement and November 17. link
AllianceBernstein crossed the $1 billion mark for assets in its ETF business earlier this month, barely a year after it entered the ETF market. link
The rise of active-managed exchange traded funds and the enduring popularity of low-cost ETFs are precipitating an unprecedented squeeze for funds stuck in the middle of these two camps, at least in the US.
Low-cost and active ETFs attracted $39bn in October whilst mid-market vehicles suffered a net $4bn in outflows, according to figures from SSGA. link
Movers and Shakers
Kawtar Mouadine has joined the Sales and ETF Capital Markets team at Chimera Capital in Abu Dhabi.
Amundi has appointed Sunny Leung as its new head of exchange-traded funds, indexing and smart beta sales for Asia ex-Japan.
From behind the Desk
Is it more important to know the capital of Bolivia or how to invest?
For those who still remember school, you will know there are lots of “stuff” you learned back then that have turned out to be absolutely useless to you in your adult life. Let’s face it, the school system in most countries is not set up to create self sufficient young adults.
Which brings us to our main point, HOW WOEFUL FINANCIAL EDUCATION IS.
Most people have no clue what a “fund” is, never mind knowing what the difference between a mutual fund and an ETF is. This makes people very vulnerable and open to all sorts of unscrupulous behaviour from Advisors, Influencers or basically anyone who has a predefined agenda.
Yes, the asset management industry has tried to wave the flag for financial education, but most of their content is either self-serving, too narrow or simply not quite hitting the spot.
Unfortunately, there are no easy wins here and the bar is very high (we mean most people in mutual funds still have no idea about ETFs), therefore making this journey a marathon and not a sprint.
So, what can be done to fix this problem?
Teaching kids at home about investing is one solution. Having financial education as a subject in school/college/university is another. Producing targeted content on platforms frequented by kids another (think TikTok). The list goes on and on.
Every journey starts with a first step and having a service first mentality is a great place to begin from, not a “what’s in it for me approach”.
So if there was a legacy we could leave on earth, it would be make a dent on the above.