JPMorgan to acquire Nutmeg
A large number of fund launches, followed by the official ETF conversion of four Dimensional equity mutual funds totalling $28.8 billion. The week closed with an equally significant and surprise announcement of JPMorgan’s acquisition of Nutmeg.
Fund Launches and Updates
Norway-based Arcane Crypto is planning to launch an exchange-traded product with Valour later this year. The ETP will be based on Arcane’s crypto fund and will allow investors to buy and sell the product through their brokers, tracking the performance of the Arcane Assets Fund. Link
Franklin Templeton has reduced the TER on the Franklin S&P 500 Pairs Aligned Climate UCITS ETF from 0.15% to 0.07% until 31 May 2022. Additionally, the Franklin Liberty Euro Short Maturity UCITS ETF fee has been cut by 10 basis points to 0.05% until 30 June 2022. Link
On June 15th HANetf launched the Fischer Sports Betting and iGaming UCITS ETF, ticker BETS, on the Deutsche Börse. Link
Invesco has launched the Invesco MSCI China Technology All Shares Stock Connect UCITS ETF (MCHT) on the London Stock Exchange with a total expense ratio (TER) of 0.49%. Link
Leverage Shares launched an additional eight stock tracker ETPs which are listed on the London Stock Exchange, Euronext Amsterdam and Paris. The new ETPs provide 1:1 exposure to US and Chinese stocks and are physically replicated. TER 0.15%. Link
Norilsk Nickel has launched physically-backed copper and nickel exchange-traded commodities via its Global Palladium Fund. The GPF Physical Copper ETC and GPF Physical Nickel ETC are listed on the London Stock Exchange with total expense ratios of 0.85% and 0.75%, respectively. Link
Texas-based investment adviser US Global Investors is set to launch the US Global Jets UCITS ETF on the London Stock Exchange later in June and will be available in US dollar (JETS LN) and pound sterling (JETP LN) share classes.
The fund, which replicates the strategy of the $4 billion NYSE Arca-listed US Global Jets ETF (JETS US), is coming to market via London-based HANetf’s white-label ETF platform. Expense ratio of 0.65%. Link
In a milestone moment, Dimensional Fund Advisors just became one of the biggest players in the U.S. $6.5 trillion ETF space. Their successful conversion of four equity mutual funds totalling $28.8 billion of assets into ETFs finalised last week.
Dimensional now has seven ETFs in its lineup and has filed for at least two more conversions. Link
First Trust has launched the First Trust Expanded Technology ETF on the NYSE Arca, an actively managed ETF which seeks to capture the growth of technology related companies. Link
KraneShares announced that the KraneShares Electric Vehicles & Future Mobility ETF (Ticker: KARS) now tracks the Bloomberg Electric Vehicles Index. KARS currently has over $200 million in assets under management (AUM). Link
Fidelity Investments launched a new active bond ETF, the Fidelity Preferred Securities & Income ETF (FPFD). FPFD is the first preferred securities product from Fidelity. Link
Renaissance Capital announced the cross listing of their Renaissance IPO ETF (Ticker: IPO) and their Renaissance International IPO ETF (Ticker: IPOS) in Peru on the Lima Stock Exchange, Bolsa de Valores de Lima (BVL). Link
ETF Managers Group (ETFMG) has launched its first suite of 2x Daily Leveraged and Inverse ETFs – the ETFMG 2x Daily Travel Tech ETF (AWYX), ETFMG Prime 2x Daily Junior Silver Miners ETF (SILX), and ETFMG Prime 2x Daily Inverse Junior Silver Miners (SINV). Link
Global ETFs and ETPs broke through the US$9 trillion milestone at the end of May 2021. The assets rose 2.8% to a record US$9.21 trillion, from US$8.96 trillion at the end of April, according to the latest ETFGI report.
ETFs and ETPs listed globally gathered net inflows of US$97.08 billion in May, bringing year-to-date net inflows to a record US$559.48 billion, which is higher than the prior record of US$229.34 billion gathered at this point last year. Link
In May, net flows into inflation-linked exchange traded products hit a record $4.4bn. In just five months of 2021, the $18bn in net flows into linker ETPs have already surpassed 2020’s full-year record of $17.3bn, according to data from BlackRock.
Through May, fixed income ETF flows have amounted to $86bn so far, leaving some work to be done to catch up with last year’s record tally of $231bn and the $228bn of 2019. Link
Assets in BlackRock’s exchange traded fund business raced beyond the $3tn milestone.
BlackRock predicted last week that the ETF industry’s assets would reach $15tn as early as the end of 2025, helped by increasing demand for environmentally friendly strategies and more usage by debt investors.
ETF assets managed by State Street Global Advisors passed the $1tn mark in April. The Boston-based investment manager, the third-largest ETF operator behind BlackRock and Vanguard, has registered inflows of $32.9bn so far this year, up from $19.3bn in the first five months of 2020.
Rory Tobin, State Street’s global head of ETFs, said “the entire ETF ecosystem is becoming more powerful” as adoption spreads more widely beyond the US and usage grows across a wide range of trading and advisory platforms.
“The growth trends in Europe are very encouraging and we have only just scratched the surface for ETF adoption across Asia,” added. Link
In major news last week, JPMorgan announced their acquisition of Nutmeg –the business will become wholly owned by JPM and will establish the bedrock of their digital wealth management offering outside the US. Link
Brown Brothers Harriman has published the findings of its fourth annual Greater China ETF Investor Survey, which reports that 92% of investors in the region expect to increase their allocation to ETFs in the next year, an increase of 10 percentage points from 2020.
The survey found that the appetite for ETFs continues to grow in Greater China, especially around thematic ETFs and fixed income strategies as advances in digital assets and innovation in ESG ETF strategies continue to evolve. Link
More than 200 companies are in danger of being thrown out of a family of FTSE Russell stock indices for failing to meet more stringent environmental standards.
The 208 companies represent 13.5 per cent of the 1,546 stocks in the FTSE 4Good index series — designed to measure the performance of businesses with strong ESG practices — which is tracked by a range of ETFs and investors such as the Japanese Government Pension Investment Fund.
FTSE Russell has given the companies 12 months to meet its tighter climate-performance standards or face deletion from the indices. Link
Although U.S. based active funds remain a small slice of the industry with assets making up just 3.4% of the overall ETF market, they’re now being created at twice the rate of their passive rivals.
U.S. ETF issuers have launched 115 active products versus just 51 passive funds YTD, according to data compiled by Bloomberg. This is the first time active launches have outstripped passive.
Firms are also ramping up their thematic offerings — a record 22 thematic funds have launched since the start of the year, including Wood’s $619 million ARK Space Exploration ETF (ARKX) and BlackRock Inc.’s $1.4 billion U.S. Carbon Transition Readiness ETF (LCTU), which set a record in April with the industry’s biggest-ever launch. Link
In D.C., U.S. regulators on Wednesday again delayed a decision on whether to approve an application for what would be the country’s first bitcoin exchange traded fund, filing a request for public consultation over concerns about market manipulation. The move by the U.S. Securities and Exchange Commission on Wednesday was the second delay for the VanEck Bitcoin Trust’s proposed bitcoin ETF after an extended delay in April. Link
Here are some of the agency’s key questions for ETF issuers which have until July to respond:
Whether the trust and shares associated with the ETF would be susceptible to manipulation?
Whether Cboe’s plan is set up to prevent fraud and manipulation?
How transparent is Bitcoin?
Has regulation of the Bitcoin market changed substantially in the past five years?
What views do commentators have on the size and regulation of CME’s Bitcoin futures contracts? Link
Monday’s historic conversion of almost $29 billion of mutual funds from Dimensional Fund Advisors into ETFs could signal boom times for the likes of Citigroup Inc.
Now the bank expects the record conversion to be the first of many.
“We have clients and non-clients alike reaching out to us asking us about this,” Peggy Vena, Citigroup’s director of ETF product development for North America, said in an interview. “I think we’re going to see more and more of this.” Link
BlackRock has set a goal for half of its US ETF flows to come from adviser models. Last year, about a third of BlackRock’s US ETF net sales came from a range of packaged portfolios. The model market is expected to grow from about $4tn last year to $10tn in the next five years. BlackRock has 51 models in Morningstar’s database — more than any other manager — as of the end of 2020. Link