Mad Men meets ETFs
People who watched the TV series Mad Men will remember the show’s star, Don Draper, the smooth talking advertising genius. I often wonder if Don is real and actually works in the ETF industry because boy, can some of these managers really put a spin on how they are positioning Active ETFs.
Morningstar has released some reports this week on the topic that I cover below. In one of them they quote “most active ETFs are less active than investors expect”. I suppose it all boils down to what is “active” as that can be very subjective. Is active high conviction, benchmark agnostic, good old fashioned stock picking OR is it anything that simply does not track the benchmark 100%?
I would guess the man on the street would assume the former but that’s where definitions come into play and we enter the dreaded grey space. Maybe it’s just me, but the way active ETFs are being pitched feels a lot like how ESG ETFs started out and we all know how that story ended.
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Fund Launches and Updates
EUROPE
Franklin Templeton has expanded its Catholic principles range with the launch of a global equity ETF. The Franklin MSCI Word Catholic Principles UCITS ETF (FLXA) will be listed on the Deutsche Boerse tomorrow, the London Stock Exchange on 26 April and the Euronext Milan on 9 May. The ETF has a total expense ratio (TER) of 0.27%.
Legal & General Investment Management has launched the L&G Multi-Strategy Enhanced Commodities ex-Agriculture & Livestock UCITS ETF, working in partnership with Barclays. The L&G Multi-Strategy Enhanced Commodities ex-Agriculture & Livestock UCITS ETF (XAGR) is listed on the London Stock Exchange, Deutsche Boerse, SIX Swiss Exchange and Euronext Milan with a total expense ratio (TER) of 0.30%.
HANetf is proposing to overhaul its metaverse ETF into a “Web 3.0” strategy, with a new name and index alongside broadening its sector exposure. The new sectors include tokenisation, blockchain, big data and AI companies. METR will be renamed to the ETC Group Web 3 UCITS ETF.
BlackRock has expanded its iShares iBonds range with the launch of four fixed income ETFs, offering exposure to US and Italian government debt.
- iShares iBonds Dec 2027 Term $ Treasury Ucits ETF
- iShares iBonds Dec 2029 Term $ Treasury Ucits ETF
- iShares iBonds Dec 2026 Term € Italy Govt Bond Ucits ETF
- iShares iBonds Dec 2028 Term € Italy Govt Bond Ucits ETF
Tabula has launched its first non-fixed income ETF, a gold exchange-traded commodity (ETC) that adheres to certain responsibility standards.The SMO Physical Gold ETC (BARS) is listed on the London Stock Exchange with a total expense ratio (TER) of 0.29%.WisdomTree has launched an ETF that seeks to track the performance of US large-cap high-growth companies. The US Quality Growth Ucits ETF (QGRW), which has a total expense ratio (TER) of 0.33%, lists on Frankfurt’s Börse Xetra and Milan’s Borsa Italiana.
ETC Group has launched the ETC Group Core Bitcoin ETP tailored specifically for benchmark-conscious, long-term buy-and-hold investors, and global institutional investors with extended liquidity and risk management needs. The fund has a TER of 0.30% and lists on Xetra.
AMERICAS
YieldMax bolstered its ETF library with the launch of the YieldMax Bitcoin Option Income Strategy ETF (YBIT) . The fund is actively managed and has a net expense ratio of 0.99%.
Optimize debuted its first ETF, the Optimize Strategy Index ETF (OPTZ), which tracks an in-house index. The index’s underlying model focuses on quality and momentum factors to select its holdings. The fund lists on the Nasdaq Stock Market with an expense ratio of 0.50%.
Themes unveiled the Themes Robotics & Automation ETF (BOTT) on the Nasdaq Stock Market. BOTT has an expense ratio of 0.35%.
FT Vest have launched two new buffered ETFs offering exposure to ETFs tied to the Nasdaq-100 and the S&P 500 indexes. The FT Vest Nasdaq-100 Conservative Buffer ETF – April (QCAP) looks to deliver the price return of the Invesco QQQ Trust (QQQ) up to a pre expenses cap of 15.21%, while protecting against the first 20% of losses.
Meanwhile, the FT Vest U.S. Equity Enhance & Moderate Buffer ETF – April (XAPR) aims to double any upside price return of the SPDR S&P 500 ETF Trust (SPY) up to a pre expenses cap of 12.02% while protecting against the first 15% of downside performance.
Both funds list on the Cboe BZX Exchange, with QCAP charging a net expense ratio of 0.90% and XAPR charging 0.85%.
ASIA-PACIFIC
China Asset Management (Hong Kong) has received the go-ahead to launch bitcoin and ether ETFs and expects to list the two products on the Hong Kong Stock Exchange imminently.
A podcast series focused on exploring the career journey of industry leaders within the ETF and Digital Assets space.
This week we hear from Ryan Szakacs, Head of ETF Capital Markets at JP Morgan Asset Management.
In this conversation, we hear Ryan talk about how a walking tour of Wall Street led to his career in ETFs, what it was like being downtown the morning of 9/11, and how being his daughter’s softball coach was one of the most rewarding things he has ever done. Listen to the interview here.
Noteworthy
Europeans are ‘less hard-working’ than Americans according to the boss of Norway’s giant oil fund. In an article published in the FT, Nicolai Tangen said Europeans were less ambitious, more regulated and more risk-averse than the US. Oh, and we work less.
A double whammy of Active ETFs reports from Morningstar this week, one covering Europe, the other the US.
Commenting on the US, Morningstar states that since the beginning of 2019, actively managed ETFs’ share of the US ETF market has more than quadrupled—from just over 2.0% to 8.5% as of March 31, 2024.
In Europe, they claim that Active ETFs are on the rise and of the 87 active ETFs now available on the continent, a whopping €33.8 billion (£29 billion) in assets had been raised as at the end of March.
Mover and Shakers
Another senior executive is departing Global X, becoming the sixth within the past five months. Chief Marketing Officer Steve Munroe will resign May 3, a Global X spokesperson said. His resignation announcement follows that of General Counsel Susan Lively this month.
Sim Singh has joined Capital Group as Senior ETF Product Specialist.
From behind the Desk
I’ve been slogging away at this newsletter for over four years now (it takes up most of my Sunday evening) trying to create some value and doing it all out of the goodness of my heart.
But now I am thinking of taking it in a different direction, focusing less on reporting the news and more on interpreting the news with more deep dives into flows, topics of interest, and more focus on calling out the bullshit. Some of this I will put behind a paywall i.e. you need to pay for it.
But before deciding anything, I’d like to hear your view. Please take 30 seconds and give me your thoughts?
Take the survey here.
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