• Andrea Murray

Global ETP Assets Cross New Record



We all know that ETF flow data likes to take its time and it has finally been revealed that February ended with record breaking assets of $8.3 trillion. History and fund launches seem to repeat themselves and as such, the trend of ESG and Bitcoin ETP product launches continue. For something completely different and to keep us on our toes, Leverage Shares added 25 new single-stock inverse and leverage ETPs to its roster. Read on for more top ETF highlights from last week.


Fund Launches and Updates


ETF provider HANetf launched the Global Online Retail Ucits ETF, ticker IBUY, on the London Stock Exchange. The benchmark index is made up of a globally listed companies which generate over 60% of their revenue from online retail and/or online marketplace commerce. Total expense ratio of 0.69%. Link


Leverage Shares has added 25 single-stock short and leveraged ETPs to its line-up which are listed on the LSE. The strategies launched include names such as a triple leveraged Tesla and PayPal ETPs while investors can also purchase S&L ETPs of UK blue chips such as Barclays and BP. All the S&L ETPs are physically backed with the underlying shares and trade in US dollars, sterling and euros.


Invesco launched two ESG ETFs including the first ETF to track the recently created FTSE All Share ESG Climate index. The Invesco FTSE All Share ESG Climate UCITS ETF (FASE) and the Invesco MSCI Europe ex UK ESG Universal Screened UCITS ETF (ESEU) are listed on the LSE with TERs of 0.12% and 0.16%, respectively. Link

UBS Asset Management has expanded its ETF range with the launch of a China large-cap tech strategy. The UBS ETF Solactive China Technology UCITS ETF (CQQQ) is listed on SIX Swiss Exchange, Borsa Italiana and the Deutsche Boerse with a total expense ratio of 0.47% for the US dollar share classes and 0.52% for euro share classes. Link


VanEck has slashed the fee on its bitcoin ETN in half less than three months after launch. The VanEck Vectors Bitcoin ETN (VBTC) has seen its total expense ratio reduced from 2% to 1%. Link


A proposed ETF would invest the majority of its capital into companies that have bitcoin on their balance sheets or are otherwise connected to the cryptocurrency. Valkyrie Digital Assets, which has also filed a bitcoin ETF application, filed for the Valkyrie Innovative Balance Sheet ETF with the SEC in partnership with KKM Financial. Link


The first Bitcoin ETF, launched in Canada, is now also available in Latin America. The Purpose Bitcoin ETF made its entry into Chile and began trading on the Santiago Stock Exchange on March 8th. The arrival marks a significant event for the Santiago Stock Exchange, the third largest in Latin America, as the first product of its kind to be traded in this market. Link


Brazil has become the second country in the Americas to approve a bitcoin exchange-traded fund following the three launched in Canada this year. The Brazil Securities and Exchange Commission (CVM) has approved blockchain investment firm QR Capital's bitcoin ETF which will trade on the Sao Paulo-based B3 exchange. Reuters reported the ETF listing will take place by June. Link


Flows


Global assets invested in ETFs and ETPs hit a new record of USD8.30 trillion at the end of February 2021 having gathered the highest ever monthly net inflows of USD139.46 billion, bringing year-to-date net inflows to a record level of USD222.54 billion.


The Global ETF/ETP industry had had 8,749 ETFs/ETPs, with 17,421 listings, assets of USD8.30 trillion, from 528 providers listed on 77 exchanges in 62 countries at the end of February.

Fixed Income ETFs/ETPs reported USD9.08 billion in net inflows.


Commodity ETFs/ETPs saw net outflows of USD2.04 billion in February.


Active ETFs/ETPs listed globally reported net inflows of USD16.90 billion.


Substantial inflows can be attributed to the top 20 ETFs by net new assets, which collectively gathered USD60.61 billion during February, Vanguard S&P 500 ETF (VOO US) gathered USD11.53 billion. Link

State Street Global Advisors reported €4.6bn in net inflows in February into recently launched SPDR Bloomberg SASB US Corporate ESG ETF. The ETF invests in US-dollar denominated, investment grade corporate bonds.


According to SSGA, fixed income will drive the growth of ESG ETFs and have predicted that the global ESG ETF market could be $1.5tn in assets under management by 2025. Demand from large institutional investors, asset owners and financial authorities is driving the growth of fixed income ETFs. These large investors are typically asking if there is an ESG version because it is either part of their mandate or they want to improve the scoring of their ESG portfolio. FT Link


Just one month after launch, the first ever bitcoin ETF has hit the $1 billion mark in assets under management. The Purpose Bitcoin ETF was approved in Canada and since the launch of the fund, bitcoin surged to record highs of more than $61,000 and trades at $59,000 as of Friday afternoon. "Hitting this milestone so quickly proves that investors are seeking convenient, safe access to cryptocurrencies," Purpose Investments CEO Som Seif said. Link


Noteworthy

Vanguard has halted plans to obtain a fund management licence in China just months after moving its main Asia office to Shanghai. Vanguard added that it would instead focus on its investment advisory partnership with Ant Group. The move comes after a rush of interest in China’s fast-growing mutual fund industry from some of the world’s biggest investors. A person familiar with the Chinese fund industry suggested its practice of not paying third-parties commissions for reselling its funds was causing distribution issues. FT Link


In 2020, strategic beta ETFs, which accounted for around one-fifth of the US ETF market, gathered $16bn, or approximately 4% of flows, punching well below their weight. What’s behind this? It’s likely that the way these products are positioned to advisors, as well as the necessity for increased complexity to differentiate newer offerings, is responsible for the lackluster adoption. Advisors can find them too complex and can be tempted to make factor bets. Link

Interactive Investor is exploring an initial public offering in London this year on the back of a boom in the retail investing. Interactive Investor now accounts for about a fifth of the retail investment platform market but is the only big competitor not to be listed.


There has been a surge in trading activity among younger retail investors in the UK and trading volumes in the UK were boosted by the number of people stuck at home during the pandemic. Pension reforms and reduced social spending have also meant that more people have cash to invest in the market. Interactive Investor reported that the number of people signing up for accounts jumped almost 370 per cent in the final two weeks of January, with demand from 18- to 25-year-olds rising more than 1,200 per cent. FT Link


In case you missed it…

French-Swiss explorer Christian Clotis leading a team of 15 volunteers through a research expedition where they will spend six weeks underground without phones, watches or natural light. Hard pass, thank you very much - you lost us at underground and then you threw in “no phones”.


The temp in the Pyrenees mountain cave where they will be spending the 40 days will be 12C. No light, 12C – sounds like they could have done this study aboveground in London. And really, who are these incredibly brave people? Apparently 2020 was not enough of an experiment.


Keep an eye out for our special report which we will be sharing this week on the changing ETF distribution landscape in the U.S. - a lot has evolved permanently and old school traditionalists are a bit salty about it.


Thank you for reading and have a great week!


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