• Andrea Murray

European Listed ETFs Enjoy Record First Half


According to Bloomberg Intelligence, European listed ETFs have brought in over $109bn in flows through the end of June. Brussels is pushing for a consolidated tape provider and ETF management fees are on a downtrend. Read on for more top ETF highlights from this week.


Fund Launches and Updates

EUROPE

Legal & General launched a multi-factor ETF that offers exposure to a basket of commodity futures: energy, precious metals, industrial metals, livestock and agriculture. The L&G Multi-Strategy Enhanced Commodities UCITS ETF (ENCO) is listed on the LSE with a total expense ratio of 0.30%. Link


Lyxor has unveiled an ETF that tracks sovereign Eurozone green bonds --the Lyxor Euro Government Green Bond (DR) UCITS ETF was listed on Euronext on 6 July with a total expense ratio of 0.2%. Further listings will follow on Xetra, London Stock Exchange and Borsa Italiana in the coming weeks. Link


HSBC Asset Management has entered the climate ETF space with the launch of a global Paris-aligned Benchmark strategy. The HSBC MSCI World Climate Paris Aligned UCITS ETF (HPAW) is listed on the London Stock Exchange with a total expense ratio of 0.18%. Link


Leverage Shares expanded their leverage and inverse roster with 3x ETPs on Airbnb, Palantir, Plug Power and Roku. Link


Saturna Capital and HANetf have joined forces to launch an actively-managed ETF with carbon offsetting. The Saturna Sustainable ESG Equity HANzero Ucits ETF is a Ucits version of its US-based fund launched in 2015. Link


THE AMERICAS

Fund launches from last week below Link:


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ASIA-PACIFIC

VanEck Australia has launched its first externally managed active ETF - the VanEck Bentham Global Capital Securities Active ETF -- in partnership with a Sydney credit boutique, Bentham Asset Management. Link

Flows


According to data from Bloomberg Intelligence, ETFs listed in Europe saw $109bn inflows in H1 this year, just shy of the record $120bn inflows in 2020 and $112bn net new assets seen in 2019. The surge of assets into ESG strategies continued apace during H1 2021 with the asset class now claiming an 11% market share in European ETFs. And the pace of European ETP launches has continued with 238 new openings versus 78 closures as of 25 June. Link





European Issuer growth rates: Industry has grown more than 20% in 2021, in-line with its long-term average and above last year's 14% pace. iShares, with almost 45% market share, has boosted assets 19% this year. Vanguard and State Street are expanding faster, both by 27%. HSBC and Legal & General exceed 35%. Coinshares and HANetf's growth has exceeded 50% this year. Link


Noteworthy


Brussels is to put forward proposals to increase the transparency and decrease the cost of market data as it aims to boost the competitiveness of the EU ETF industry. Tilman Lüder, head of the securities markets unit at the European Commission, said Brussels was currently in discussions with data providers about developing a consolidated tape with hopes that a beta version of the consolidated tape will be available by 2023. Policymakers believe flaws in the availability, quality and consistency of the EU’s trading data are hindering retail investor participation, and leaving Europe’s ETF industry trailing the US. Link


A survey conducted by Nickel Digital Asset Management of institutional investors and wealth managers from the US, UK, France, Germany, and the UAE who currently have exposure to cryptocurrencies and digital assets, reveals that 82% expect to increase their exposure between now and 2023. Four out of ten say they will dramatically increase their holdings, while only 1 per cent said they would sell their entire holdings, and just 7 per cent said they would reduce their exposure. Link


Ark Invest has set the bar on bitcoin ETF fees after becoming the first asset manager to reveal a fee for its proposed bitcoin ETF of 95 bps. The Ark 21Shares Bitcoin ETF will track the performance of bitcoin in US dollars, as measured by the performance of the S&P bitcoin Index. As mentioned in the article, the race for product approval is still on and given there are a number of identical exposures offered, it will really come down to brand, cost, and who gets out of the gate first to determine which fund will gather the most assets. Link

The number and variety of ETFs in the Asia Pacific region is expanding faster than in the US and Europe, and Asian institutions are increasingly turning to locally listed products for more cost-efficient trading during Asian market hours. One of the major reasons Asian institutions traded overseas ETFs was a lack of product choice in the local market, but that has changed in recent years, with a wider range of exposures, strategies and themes launching in markets like Hong Kong. Link


Other noteworthy items:

- The FT reported this morning that ETF expense ratios have stopped falling and in some cases have started to rise for the first time. Link - HANetf plans to launch a U.S. office in 2022. Link


- ETF specialist ULTUMUS has partnered with Alveo, a provider in market data integration and analytics solutions for financial services. Link


- In the U.S., the SEC has extended its review of SkyBridge Capital’s application for their First Trust SkyBridge Bitcoin ETF Trustto Aug. 25. Link


- CoinShares to partner with Invesco on blockchain ETF after acquiring Elwood indexing arm. Link


In case you missed it…

Possibly an appropriate offset to the morning after an incredibly stressful ending to a game, we found the list of top 20 cities for mental wellbeing in the world. Not surprisingly the top 5 are in Iceland, Switzerland, Finland, New Zealand, and Australia. 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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