• Andrea Murray

Global ETF Inflows Cross the $1 Trillion Mark


No slowing down in 2021 as we see the first calendar year where global ETPs bring in over $1 trillion of assets.


More record-breaking news with the new BetaShares Crypto ETF creating a trading volume record on the ASX and two firm acquisitions announced in the U.S and here in Europe. Read on for more ETF and Digital Assets highlights from the week.


Fund Launches and Updates

EUROPE

Deka has added the Deka MSCI EUR Corporates Climate Change ESG UCITS ETF (D6RA GY), to its line-up of climate-conscious socially responsible investment products. The fund is listed on Deutsche Börse Xetra with a TER of 0.18%. Link


Bringing a successful trio of thematic ETFs across the pond, Global X last week launched the Global X Cloud Computing UCITS ETF (CLO), the Global X Genomics & Biotechnology UCITS ETF (GNOM) and the Global X U.S. Infrastructure Development UCITS ETF (PAVE). All three are listed on the London Stock Exchange with total expense ratios of 0.55%, 0.50% and 0.47%, respectively. Link


Partnering with HANetf, SparkChange has launched the world’s first physically-backed EU Carbon Allowances exchange-traded product, the SparkChange Physical Carbon EUA ETC (CO2). Listed on the London Stock Exchange, the fund has a TER of 0.89%. Link


Effective today, 9 November, the Lyxor Core Euro Stoxx 300 UCITS ETF (MFDD) will see its index change from the Euro STOXX Total Return index to the MSCI EMU Broad Select Net Total Return index. As a result, MFDD will see its name change to Lyxor MSCI EMU ESG UCITS ETF under the same ticker, with the total expense ratio (TER) rising from 0.07% to 0.12% from December. Link


Next month, DWS will be closing the Xtrackers USD Overnight Rate Swap UCITS ETF (XUSD) and the Xtrackers II USD Asia ex-Japan Corporate Bond UCITS ETF (ALQD). Additionally, the $3.1bn Xtrackers MSCI Japan UCITS ETF (XMJP) will close its sterling-hedged share class. Link


THE AMERICAS

In Canada, Horizons ETFs launched the Horizons High Interest Savings ETF (ticker CASH) which aims to provide a low-cost cash savings alternative to traditional bank accounts, with daily liquidity and a competitive interest rate. The new ETF has an annual management fee of 0.08% and is listed on the Toronto Stock Exchange (TSX). Link


U.S. launches last week:

Source: Link


ASIAPAC

VanEck will shortly list the VanEck Global Listed Private Equity ETF (ASX: GPEQ) on the ASX and is the first Australian private equity ETF. Link

Flows


According to Bloomberg data, inflows into global ETPs have officially surpassed the $1 trillion mark making 2021 the first calendar year where ETPs have reeled in over $1 trillion. Equity funds have taken the lion’s share of the global ETP flows and year-to-date inflows have topped $735 billion, with U.S. funds accounting for $540 billion of those. fixed income funds have raked in in just under $234 million so far in 2021. Link


Value stock focused ETFs have seen investors pull a record net €3.7bn from European value ETFs in the three months to September, according to data from Morningstar Direct. This was well above the previous record quarterly outflow of €1.3bn seen in the first quarter of 2020. Link


Canadian ETFs gathered $3.9 billion in October, bringing 2021’s year-to-date inflow to $43 billion. The total so far this year compares to a record $41 billion last year, and total ETF assets crossed the $300-billion milestone, the report said. Link


The COP26 Summit has wrapped up and as we all know, investors are pouring hundreds of billions of dollars into green investments. Global inflows into sustainable funds reached $477.4bn in the first nine months of this year, well above the $366.6bn gathered over the whole of 2020, according to Morningstar. Inflows into sustainable funds sold in Europe account for 81.6 per cent of the overall growth so far this year while the US has contributed 11.8 per cent of the new business. Link

Noteworthy


The acquisitions are showing no signs of slowing down with the recent announcement of Scalable Capital plans to acquire specialist ETF information provider justETF for an undisclosed sum. Link That comes on the heels of news that Victory Capital which will acquire WestEnd Advisors for $480 millon. WestEnd manages $18 billion in core model allocation strategies for financial advisers, including four primary ETFs. Link


Bloomberg Intelligence is making a call that the SEC will more likely approve an Ethereum futures-based ETF as early as Q1 2022 well before giving the greenlight on a spot Bitcoin ETF. Link


As part of a wider ESG strategy, the FCA has published a Discussion Paper inviting views on potential criteria to classify and label investment products aimed at helping consumers navigate their sustainability characteristics. The Strategy will be built around five key themes and the input received will then guide the FCA’s policy design in this area, ahead of consultations on new proposals in spring 2022. Link


Another impressive record set, this time in Australia, where the BetaShares Crypto Innovators ETF (ASX: CRYP) attracted $8 million worth of trades within 15 minutes of its ASX debut last Thursday. By midday, it had amassed trading volumes of $24.5 million and closed the day with net buys of $39.7 million. Market sources expect it to have at least $42 million in funds under management once settled – about five times bigger than any previous ASX-listed ETF in its first day of trading. Link

There seems to always be someone who likes to rain on a parade and although the successful launch last week of the SparkChange Physical Carbon EUA ETC (CO2), has been broadly welcomed for its innovative approach, some industry observers caution that if the concept proves too successful there could be “unintended consequences”. Either way, it’s great to see innovative ESG products being introduced to market and everyone is entitled to their opinions. Link




Additional interesting reads:


Opinion piece by industry group Crypto UK outlining the negative impact the FCA has had by dragging its heels on crypto asset approvals. Link


Are you cheap or are you shiny? Eric Balchunas has a great way of describing where ETF flows tend to go in this short video clip among other subject with co-analyst James Seyyfart.


Anyone read the new Robin Wigglesworth book “Trillions” yet? This article is worth a read and has piqued our interest. The power of passive investing: time to relearn lessons – a million-dollar wager and an epic battle between an index tracker and a hedge fund. Link


Over 200 active ETFs have been launched this year. In September alone, almost half of new ETF launches on the New York Stock Exchange were active ETFs. Link


ETF issuers are not usually keen to switch custody providers as it’s not an easy process but $24 billion AUM firm BetaShares just appointed Citi after RBC announced it’s leaving Australia. Link


According to a recent Bloomberg interview, Banco Santander is actively planning to launch their first Bitcoin ETF. Link


In charts: Bond funds — where the money flowed 2020-2021 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.

61 views0 comments