• Andrea Murray

Janus Enters Active ETF ESG Space


We closed out week of big news with the announcement of State Street acquiring BBH’s investor services business and with Morningstar buying London based Moorgate Benchmarks. Plenty of global ETF launches with Janus entering the actively managed ESG ETF space. Read on for more ETF highlights from the week.


Fund Launches and Updates

EUROPE

Tabula has partnered with Haitong International Asset Management to launch Europe’s first Asia ex-Japan high yield corporate bond ESG ETF. The Tabula Haitong Asia ex-Japan High Yield Corp USD Bond ESG UCITS ETF (TAHY) is listed on the London Stock Exchange with a total expense ratio of 0.60%. Link


HANetf and iClima Earth have announced that the iClima Global Decarbonisation Enablers UCITS ETF (CLMA) and iClima Distributed Renewable Energy UCITS ETF (DGEN) are now classified as Article 9 sustainable investments under the new EU regulations. Link


Norilsk Nickel’s Global Palladium Fund has launched the world’s first exchange-traded commodity offering exposure to physically-backed carbon neutral nickel. The GPF Physical Carbon Neutral Nickel ETC (NIC0) is listed on the Vienna stock exchange with a TER of 0.75%. Link

CoinShares announced that their recently launched physically-backed Bitcoin and Ethereum ETPs have cross-listed on the Euronext exchange in Paris and Amsterdam. Link


THE AMERICAS

Joining the growing number of ESG ETFs in the U.S., Janus Henderson is launching five actively managed ETFs that integrate sustainable investing criteria. The new products are included in the below:


Source: Link


ASIA PACIFIC

Beijing is set to welcome a new stock exchange dedicated to small and mid-cap companies. Investors can currently gain China exposure by either A-Shares or H-Shares and as seen with the launch of the KraneShares ICBCCS SSE Star Market 50 Index UCITS ETF (KSTR) in May, new exchanges are often accompanied by products targeting them. Link


Flows


We already mentioned this last week but apparently media likes to repeat good news. In case you missed it, global ETF inflows have surged past 2020’s record. Worldwide net investor inflows reached $834.2bn at the end of August, surpassing the last year’s total of $762.8bn. Global assets held in ETFs are now at $9.7tn, more than double the $4.8tn at the end of 2018. Link

Noteworthy


Morningstar will become the latest big name to enter the field of “direct indexing”, following in the footsteps of a handful of industry giants including BlackRock, Vanguard and Morgan Stanley. Not to be overshadowed by the State Street/BBH news from last week, Morningstar announced the acquisition of Moorgate Benchmarks, a privately held European-based global provider of index design, calculation, and administration. Financial terms were not disclosed.


Currently a niche service only available to wealthy investors, Cerulli Associates forecasts that in the US alone direct indexing strategies will account for $4.7tn of assets by 2030, 8 per cent of all adviser-managed assets, up from just $300bn in 2019. “ESG and other drivers will lead to a future of mass or even hyper customisation,” said Tobias Sproehnle, chief executive of Moorgate who will become head of Morningstar Indexes in Europe. Link

Huge news with the agreement between State Street Corporation and Brown Brothers Harriman & Co where State Street is set to acquire BBH’s Investor Services business, including its custody, accounting, fund administration, global markets and technology services, for $3.5 billion in cash. Link


There are other ways to tap into new investors besides direct methods - Navi Mutual Fund is set to make a Vanguard strategy available in India through a new fund-of-funds scheme. The Indian fund group, which was previously branded as Essel Mutual Fund, is currently seeking the regulator’s approval to roll out six funds, one of which is the Navi Total US Stock Market Fund of Fund that feeds into Vanguard’s US-listed Total Stock Market Index Fund ETF, according to regulatory filings.


The US passive fund giant has said that it did not plan to enter the Indian market, which has proven a very hard nut to crack for even the largest global fund companies, with the likes of BlackRock, JPMorgan Asset Management and Fidelity all exiting the market in recent years. Link


As most know by this point, the growing list of firms filing a Bitcoin ETF in the U.S. has not abated and according to this article, by the time they potentially succeed this fall, it may be too late for the product to be useful for everyday investors. Great article on the ETF structure versus direct investing in Bitcoin, Ethereum, futures structure, etc. Link


We all are aware of “first mover advantage” in the ETF industry. Well, Canada and North America’s first cryptocurrency ETF is trailing a competitor that launched two months later, according to data compiled by Bloomberg. The 3iQ CoinShares Bitcoin ETF (ticker BTCQ) has now amassed C$1.2 billion in assets, compared with C$747 million for the Purpose Bitcoin ETF (BTCC).


3iQ launched its Bitcoin product in April, and it’s been larger than BTCC since May. One reason may be that it’s cheaper: Total expenses for BTCQ are capped at 1.25%, compared with 1.5% for the Purpose fund. The names behind the vehicle are also likely familiar to cryptocurrency enthusiasts, with both 3iQ and CoinShares established brands in the space. 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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