• Andrea Murray

Big Players Continue to Crash the ETF Party



A slew of new fund launches, new European ETF entrant Helveteq AG launches two crypto ETPs, and big news with Neuberger Berman’s launch of three actively managed thematic ETFs in the U.S. Read on for more ETF highlights from the week.

Fund Launches and Updates

EMEA

21Shares has launched their 30th product -- the 21Shares the Sandbox ETP (SAND) on the BX Swiss Exchange with a total expense ratio of 2.5%. The ETP will track the performance of SAND, the native token of community-driven gaming platform The Sandbox. Link


Amundi has repurposed the €170 million Amundi Stoxx Europe 600 UCITS ETF to a socially responsible investment product with the introduction of the Amundi Stoxx Europe 600 ESG UCITS ETF. The ETF’s expense ratio remains unchanged at 0.18% and is now classified as an Article 8 product under SFDR. Link


BlackRock has launched the iShares Broad $ High Yield Corp Bond UCITS ETF (HYUS) and the iShares Broad € High Yield Corp Bond UCITS ETF (EH1Y). Both are listed on the London Stock Exchange and Deutsche Boerse with total expense ratios of 0.25%. Link On 11 April, they also listed the iShares MSCI World Materials Sector ESG UCITS ETF (WMTS), the iShares MSCI World Industrials Sector ESG UCITS ETF (WINS), the iShares World Energy Sector ESG UCITS ETF (WENE) and the iShares MSCI World Communication Services Sector ESG UCITS ETF (WCMS). All four were launched on the Euronext Amsterdam with TERs of 0.25%. Link


BNP Paribas Asset Management has launched the BNP Paribas Easy JPM ESG Green Social and Sustainability IG EUR Bond ETF (ASRQ) which is listed on Euronext Paris and Deutsche Boerse with a total expense ratio of 0.25%. Link

New Swiss ETP issuer Helveteq AG lists its first crypto products on Bitcoin and Ethereum on SIX Swiss Exchange. Link


HSBC Asset Management has launched the MSCI Emerging Markets Climate Paris Aligned ETF (HPEM) and the HSBC Asia Pacific ex-Japan Climate Paris Aligned UCITS ETF (HPAX). Both ETFs are listed on the London Stock Exchange with total expense ratios of 0.18% and 0.25%, respectively. Link


In a shareholder notice, Invesco asked shareholders to vote on changing the investment objective of its Invesco Global Clean Energy UCITS ETF (GCLX) necessary to reclassify it from Article 8 to Article 9 under SFDR. Link


THE AMERICAS

Asset manager AXS Investments continues to expand its ETF lineup via firm purchase with their recent acquisition of ETF Strategist, Tuttle Capital. Tuttle's lineup includes a range of ETFs focused on the SPAC market as well as SARK the fund that shorts ARK Invest's Innovation ETF. Tuttle's lineup includes six funds in all, with approximately $417 million AUM. Link


Big news with $460bn AUM asset manager Neuberger Berman Group LLC entering the ETF space with their launch of three actively managed ETFs last week. The new funds include the Neuberger Berman Connected Consumer ETF (ticker NBCC), the Carbon Transition & Infrastructure ETF (NBCT), and the Disrupters ETF (NBDS). Each fund will carry a 0.55% expense ratio. Link


According to a recent SEC filing, ProShares is planning to launch an inverse Bitcoin Strategy ETF. ETF issuer Direxion was first to file a Bitcoin Strategy Bear ETF but the SEC requested for the filing to be withdrawn – they have since amended their filing and are set to be first to launch but time will tell. Globally, ProShares will not be first to market. In Europe, 21Shares launched its Short Bitcoin ETP (SBTC) in January 2020 and in Canada, Horizons ETFs Management, launched the BetaPro Inverse Bitcoin ETF (BITI) on the TSE in April 2021. Link


The SEC has approved Teucrium’s bitcoin futures ETF which was filed under the ‘33 Act — the regulation under which spot bitcoin ETFs are filed. Link


Full List of U.S. ETF Launches:

Source: Link


ASIAPAC

Nomura Asset Management Co., Ltd has listed the NEXT FUNDS Solactive Japan ESG Core Index ETF on the TSE with an expense ratio of 0.12%. Link


Fund Flows and Trading Volume


In Europe, the industry recording net inflows of $9b vs $12bn in February. This was the first time in well over a year that net flows dropped below $10bn on a given month. Equity ETFs recorded only $2.3bn inflows, Fixed Income recorded $2.5bn of inflows and commodities roared to the top of the asset class ladder with $4bn of net inflows. March was a positive month for Cryptocurrencies, recording $228m of new inflows, the majority of this going into Bitcoin exposure products. Canadian ETFs had $4.8 billion in net flows in March, led by Canadian equities and fixed-income ETFs. Equities ETFs led the pack in March with $2.5 billion of inflows. Commodity ETFs saw outflows of $47 million in March, led by gold bullion ETFs. Commodity ETFs concluded the first quarter with $284 million in redemptions. Conversely, cryptoasset ETFs saw $401 million in inflows. Canada-listed ESG ETF inflows were $391 million in March, bringing first-quarter inflows to $997 million. Link


U.S.-listed ETFs pulled in $97 billion in March. The March inflows accounted for about half of the roughly $195 billion that U.S- listed ETFs took in during the first quarter, according to SSGA. Equity ETFs took in $68 billion in March and about $153 billion for the quarter. U.S-focused equity exposures led the way in March, netting $60 billion, the report said.


Bond ETFs took in nearly $19 billion in March, after netting more than $10 billion in February. Bond ETF inflows for the quarter totalled about $22 billion. Commodity ETFs took in nearly $10 billion in March and nearly $19 billion during the first quarter. Link


Noteworthy


In the U.S., a growing trend many predicted for 2022 – mutual fund conversions continue. JPMorgan has kicked off a $9 Billion mutual fund-to-ETF switch as more than $160 billion has exited mutual funds in 2022 so far as ETFs have absorbed over $200 billion. Bloomberg Intelligence estimates that as much as $1 trillion could ultimately be converted to ETFs from mutual funds.


Past switches include Dimensional Fund Advisors, which flipped around $29 billion in June last year. Others switchers have included Motley Fool Asset Management, which finalized a nearly $1 billion move in December. Franklin Templeton has plans to join the conversion club later in 2022. Link


German online retail broker flatexDEGIRO has partnered with digital wealth manager Whitebox to offer investors tailormade ETF saving plan portfolios. The pair will offer a fully digitised investment solution for retail investors which aims to go live in the summer. ETF savings plans have fuelled a retail investment boom in Germany with the number of self-directed clients more than doubling to more than three million in two years by the end of 2021. According to this article, the amount being invested has jumped 254%, up from €166m a month in 2019 to €589m a month in 2021. Link


In Asia, a survey of 1,200 individual investors by Taiwan’s Securities Investment Trust & Consulting Association found that the majority of respondents found ETFs to be a promising area of growth. Overall, 78% of investors had a savings account as part of a broader portfolio of investment products last year, 72% had equity exposure, and 33% had ETF exposure. The survey shows three key trends in the financial services industry: an ageing society, the rise of young investors, and the growing popularity of ESG investments. The younger the investor, the more ETFs they prefer. Link


Additional reads:

The International Organization of Securities Commissions (IOSCO) is seeking feedback from the industry on its latest set of ETF good practices which include a focus on the relationship between ETF issuers and APs. Link


Detlef Glow recaps the history of ETFs in Europe via this ETF Stream article Link


Bond allocations fall to lowest level since 2008 amid low yields and vanishing liquidity Link


Most US Financial Advisors Want a Crypto ETF, Survey Finds with 86% expecting to increase their allocations over the next 12 months. Link


Good recap on the “wheat whale” and Reddit users impacting ETFs Link


Thematic funds have tripled their share of the global investment market to 2.7 per cent of all equity funds in the past decade. Link


For those in the U.S., Envestnet plans to close its Chicago headquarters and relocate to Philly as part of a shift toward a more remote-centric work environment. Nice to see larger firms sticking with the flexibility and a hybrid approach for their team. Link


Crypto firms are looking to set up shop in Dubai after it started to offer virtual asset licences, making it the latest jurisdiction to seek to become a haven for the global crypto industry. Link


Disclosure: This newsletter consists of curated articles which we have read across the globe and while we can't include every ETF related news item, we would like to hear your thoughts on something we may have missed that you feel is important. All information is sourced from 3rd party media outlets, not our own material and should also not be viewed as financial advice.



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