• Andrea Murray

European ETF Inflows Surpass 2020



We are back! We hope that you enjoyed your summer holiday and are ready to fully embrace jumper weather. Last week saw news of record ETF flows here in Europe and globally, ETF launches show no sign of slowing down. Read on for more ETF highlights from the week.


Fund Launches and Updates


EUROPE

HANetf and Quikro have launched an ETF focused on healthier living and cleaner planet trends. The Cleaner Living ESG-S Ucits ETF (DTOX) will invest in themes centred around the shift in consumer sentiment: cleaner food & dining, cleaner health & beauty, cleaner building & infrastructure, cleaner transportation, and cleaner energy. The new fund qualifies as an Article 8 strategy and has a total expense ratio of 0.59%. Link


BNP Paribas Asset Management has launched the BNP Paribas Easy MSCI China Select SRI S-Series 10% Capped Ucits ETF. It is listed on the Euronext Paris and Deutsche Börse Xetra. The fund meets Article 8 under SFDR and has an ongoing charge of 0.45%. Link


BlackRock has expanded its iShares Fixed Income ETF range by launching the iShares Global Aggregate Bond ESG Ucits ETF (AGGE). The new fund, which will be an ESG version of the iShares Core Global Aggregate Bond Ucits ETF qualifies as an Article 8 product under SFDR and has a total expense ratio of 0.10%. Link


UBS Asset Management has launched the UBS ETF (IE) MSCI World Small Cap Socially Responsible UCITS ETF which is available in two share classes. Listings will be across key European exchanges, including LSE, Xetra, Borsa Italiana and SIX Swiss Exchange. Link

THE AMERICAS If approved, Cathie Wood is getting ready to debut their second new product for the year, the Ark Investment Management’s Transparency ETF, which will closely follow an index that excludes industries including alcohol, banking, gambling and oil and gas. Link


BNY Mellon Investment Management has introduced its first actively managed ETF with the launch of an ultra-short bond fund, the BNY Mellon Ultra-Short Income ETF (BKUI US). The new ETF has been listed on NYSE Arca and is sub-advised by Dreyfus Cash Investment Strategies. The expense ratio is 0.12%. Link


In Canada, Horizons ETFs launched two new ETFs: the BetaPro Equal Weight Canadian REIT 2x Daily Bull ETF (HREU) and the BetaPro Equal Weight Canadian REIT -2x Daily Bear ETF (HRED). Shares of the ETFs will began trading last week on the Toronto Stock Exchange. Link


ASIA PACIFIC

ETF Securities launches semiconductor ETF in Australia. The ETFS Semiconductor ETF (SEMI) started trading on August 31st, 2021, on ASX. Link


Flows


According to a report today from ETF Stream, European ETF inflows through August 2021 have soared to $136bn, more than $16bn ahead of the previous full-year record. ESG and thematic products have been among the biggest driver of flows, with LGIM noting the thematic ETF market has grown from $16bn at the end of H1 2020 to $45.7bn at the end of August this year.


Speaking on the impressive uptake of ESG products, Chris Mellor, head of EMEA ETF and commodity product management at Invesco, said 47% of all ETF flows in Europe so far this year have gone into the product class, with some of the firm’s most popular exposures being ESG-screened renditions of their core product range. Link


ETFGI has reported global ETFs and ETPs gathered net inflows of USD80.45 billion during July, bringing year-to-date net inflows to a record USD739.54 billion. Assets invested in the global ETFs/ETPs industry have increased by 1.2 per cent from USD9.35 trillion at the end of June 2021, to USD9.46 trillion at the end of July. Link


Noteworthy

South Korea’s securities regulator has amended rules to allow domestic fund managers to offer Shanghai-listed exchange traded funds, paving the way for the implementation of the upcoming cross-border ETF link between the two countries. Local fund groups can now register ETFs listed on the Shanghai Stock Exchange (SSE) for sale in South Korea, following an announcement by the Financial Services Commission. Previously, only ETFs from OECD countries, Hong Kong and Singapore were permitted for sale in the country.


ETF providers believed to be working on forming partnerships include China’s Bosera Asset Management with South Korea’s KB Asset Management, while Seoul-based Samsung Asset Management is said to likely partner with Beijing-based CCB Principal Asset Management. South Korea’s second-largest manager, Mirae Asset Global Investments, is also on the list of confirmed ETF issuers for the scheme.


In South Korea, ETF assets have increased 41.5 per cent over the past 12 months, from $37.41bn to $52.94bn as of May 12 this year, according to Morningstar data. In China, ETF assets have ballooned 34.7 per cent from $93.52bn at the end of March 2020 to $126.01bn at the end of March this year. Link

Investors are pouring money in to emerging market funds that steer clear of China in the wake of Beijing’s crackdown on targeted stocks and sectors. The assets of five prominent EM ex-China exchange traded funds surged 41 per cent to $1.5bn during August, taking their year-to-date growth to 442 per cent.

The jump comes as net inflows into global emerging markets ETFs slowed to $696m in July as Beijing’s regulatory crackdown widened, well below the average of $4bn in a month in the first half, according to Morningstar data.

The largest fund in the sector, BlackRock’s iShares Emerging Markets ex-China ETF (EMXC), had assets of just $165m at the end of 2020. This had leapt to $900m by the end of July and a further 42 per cent to $1.28bn at the end of August when the index rose only 2.9 per cent. Similar ETFs from Lyxor (EMXC), Columbia Threadneedle (XCEM) and KraneShares (KEMX) have also seen net inflows. 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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