• Andrea Murray

How Firms Are Reaping the Retail Market Rewards


New market entrants seen in Australia and the U.S. while a DeFi ETF launch is planned in Brazil. And a slew of ETF partnerships focusing on the under-tapped retail market were disclosed.


And surprising news last week as the liquidity provider pool shrinks with the sudden announcement of BlueFin closing its doors in Europe.


Fund Launches and Updates


EUROPE

CoinShares has launched the CoinShares Physical Staked Tezos UCITS ETP (XTZS) and the CoinShares Physical Staked Polkadot UCITS ETP (CDOT). Both products share staking rewards with its investors and are listed on the Deutsche Boerse. Link


Bringing their European line-up total to 18, Global X has launched the Global X Blockchain ETF (BKCH) which is listed on the London Stock Exchange and Deutsche Börse Xetra, management fee 0.50%. Link


HSBC Asset Management has launched the HSBC Nasdaq Global Semiconductor Ucits ETF on the London Stock Exchange, TER of 0.35%. Link


VanEck has launched the VanEck Vectors Crypto Leaders ETN (VTOP) on the Deutsche Boerse, Xetra and SIX Exchange with a TER of 1.5%. Link


VTB Capital Investments has launched the VTB European Equity Fund (VTBL ETF) on the Moscow Exchange. Link


THE AMERICAS

In Brazil, claiming to be the world’s first ETF dedicated to decentralised finance networks is due to launch next month. The fund, the Hashdex DeFi Index ETF, will list on the Brazilian stock exchange on February 17. Hashdex at present has one ETF in Brazil, the $350m Hashdex Nasdaq Crypto Index ETF (HASH11). Link


A new entrant to the US ETF market, Subversive Capital Advisor has launched actively managed product -- Subversive Metaverse ETF (PUNK) on the Cboe BZX Exchange. Expense ratio is 75bps. Link


In Canada, BMO Asset Management Inc has expanded its suite of ESG ETFs to include 10 additional products. Details of the full list can be found here


Full list of U.S. launches:


ASIA - PACIFIC

Australia's super fund manager, Australian Ethical, has launched its first ever ETF --the "High Conviction Fund ETF" (ticker: AEAE). Link


Flows and Trading Volume


According to Lipper data, financial sector ETFs have seen net inflows of $6.3 billion between Jan. 1 and Jan. 24, more than any other sector. The Financial Select Sector SPDR Fund led with inflows worth $1.9 billion this year, while Invesco KBW Bank ETF and SPDR S&P Regional Banking ETF received over $500 million each. Link


After a nearly record-breaking volatile month, we have thankfully arrived in February. As normally seen with market gyrations, ETF trading volumes hit all-time-highs last month. ETF Stream reported that ETFs traded more than $478bn in one day in the US, surpassing the $404bn benchmark set on February 28 2020. Equity ETFs represented 89% of turnover versus 8% for fixed income ETFs.


The SPDR S&P 500 ETF Trust (SPY) traded over $100bn worth of shares for only the second time ever and the Invesco QQQ Trust (QQQ) broke its previous record with volumes of $66bn. Link


Noteworthy


Another one bites the dust, leaving just a handful of players. After 15 years since bringing their business over to Europe, liquidity provider Bluefin has closed its ETF trading business effective immediately. According to ETF Stream, BlueFin had just hired 5 additional staff making many scratching their heads on this sudden move. Link


UBS further expands into the US wealth market with its recent agreement to buy US robo-adviser Wealthfront -- all-cash for $1.4bn. California-based Wealthfront, which is popular among millennials and Generation Z customers, has 470,000 clients and $27bn of assets. Transfer of wealth from Baby Boomers anyone?


Given their target audience, we wanted to see which ETFs were available knowing their lean towards ESG, Tech, and Crypto and spoiler alert, according to their website, all three aforementioned investment categories were tagged as “popular” with ARKK, ETHE, GBTC, and QQQ falling within “what’s most popular with our clients”. Link


The PwC ETF survey has been circulated and repurposed a number of different ways but no has pointed out this chart which speaks to the above and the rise of online platforms:

More mutual fund to ETF conversation as JP Morgan announced that they will be converting $9.1bn of US mutual funds into ETFs after four funds bled a combined $2bn through November. The $9.1bn worth of funds up for conversion will be the Inflation Managed Bond Fund; Market Expansion Enhanced Index Fund, realty INcome Fund will transition into ETFs, as well as the $4.8bn International Research Enhanced Equity Fund. Link


Working in silos benefits very few but last week saw a number of collaboration efforts benefiting the retail market. ETC Group, and HANetf, who market ETC Group’s products, announced that they have partnered with comdirect to provide retail investors in Germany with savings plans backed by ETC Group’s market leading crypto ETC’s. Link And WisdomTree has partnered with online brokerage ING Germany to offer its ETFs and ETCs through the ING brokerage platform. Link


Most ETF articles that we comb tend to be flows, trends, launches, or regulatory based and we come across very few full spotlights on industry members. However, this week we found one.

Bloomberg’s highlight on the driving story behind 21Shares co-founder, Ophelia Snyder, is very interesting and one would never have guessed the answer to “what was your job before this one?” was related to marine biology. Worth a read to learn about the driving force behind their firm launch and success. Link


Additional Interesting reads:


Speaking of the under tapped ETF retail market, a list of barriers per region where the common denominator is subpar investor education. Link


Asia high-yield ETFs have been attracting substantial inflows. Link


More spot Bitcoin ETF rejections from the SEC – this time with Fidelity. Link


Martin Gilbert’s AssetCo agrees to buy River and Mercantile in £100m all-share takeover. 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.


175 views0 comments