• Andrea Murray

Northern Trust Finally Breaks into European ETF Space



This is a weekly newsletter highlighting top news in the world of ETFs that we found interesting. If you like what you read, feel free to spread it around.


Fund Launches and Updates

Northern Trust is finally breaking into Europe’s fast expanding $1.3tn ETF market, marking the latest move by a big US competitor to tap into the growing shift among European investors into exchange traded products. The FlexShares Developed Markets Low Volatility Climate ESG ETF (QVFD) and the FlexShares Developed Market High Dividend Climate ESG ETF (QDFD), are set to begin trading in London and on EuroNext on Monday. FT Link


Abu Dhabi-based asset manager Chimera Capital has unveiled its second ETF in the United Arab Emirates providing exposure to companies listed on the federation’s three domestic stock exchanges. The Chimera S&P UAE UCITS ETF is set to list on the Abu Dhabi Securities Exchange and has an expense ratio of 1.00%


Syed Basar Shueb, Chairman of Chimera Capital, said: “We are excited to bring this new UCITS-regulated product to market, which will give investors further access to the increasingly appealing UAE economy. Link


DWS is set to turn its Latin America ETF into an ESG strategy, in a further signal of the increasing demand for sustainable products. Effective 25 March, the $63.7m Xtrackers MSCI EM Latin America Swap UCITS ETF (XLMA) will change its name to the Xtrackers MSCI EM Latin America ESG Swap UCITS ETF.


JP Morgan Asset Management has expanded its core range with the launch of a short duration US Treasury bond ETF. The JPMorgan BetaBuilders US Treasury Bond 0-3 Months UCITS ETF (BB3M) is listed on the London Stock Exchange and CBOE Netherlands with a TER of 0.07%. Link


After failing to gather significant assets under management, BlackRock is set to close five ETFs which have a total of $133.3m AUM as at 19 February. The five ETFs are:


iShares Euro Total Market Value Large UCITS ETF (IDJV)

iShares EURO STOXX 50 ex-Financials UCITS ETF (IUSR)

iShares US Equity Buyback Achievers UCITS ETF (BACK)

iShares Edge MSCI EMU Multifactor UCITS ETF (EDMF)

iShares TA-35 Israel UCITS ETF (TASE)


The ETFs are set to close on 18 March. Link


CoinShares has expanded its cryptocurrency ETP range with the launch of an ethereum strategy. The CoinShares Physical Ethereum ETP (ETHE) is listed on the SIX Swiss Exchange with a total expense ratio of 1.25%. Each unit of ETHE is physically backed by 0.03 ether at launch, with the aim of offering investors passive exposure to ethereum’s native asset. Link


The Legal & General Future World Gender in Leadership UK Index fund, known as the Girl fund, will be folded into a broad LGIM “sustainable” index fund after failing to attract inflows. As of 23 February, assets amounted to just £6.1m.


Flows


Bloomberg Intelligence’s report found that ESG ETFs recorded net inflows of USD89 billion last year – almost three times more than the USD31 billion recorded in 2019, and 10 times the USD9 billion in 2018.

CryptoCompare recently published its latest monthly Digital Asset Management Review and found that despite Bitcoin's all-time high of $58,348 on the 21st of February, average ETP volumes decreased 37.8% to $936mn. Other key takeaways:


· AUM across all ETPs increased 50% to $43.9bn.

· Aggregate ETP volumes dipped, while products from ETC Group and VanEck showed high volume growth.

· Bitwise’s BITW and Grayscale’s ETCG showed the highest returns.

· Market premiums for Bitcoin products by Grayscale and 3iQ dropped.


Noteworthy


Royal Mint has terminated its eight-year physical delivery agreement with WisdomTree on the Gold Bullion Securities (GBS) one year after launching its own gold ETC on the European market. The move means investors in GBS can no longer exchange their shares for gold bullion coins or bars issued by The Royal Mint. The GBS ETC is listed on the London Stock Exchange, Euronext Paris, Borsa Italiana, and the Deutsche Boerse, with assets under management of $4.2bn. Link


Sweden’s financial watchdog has told investment firms and banks to think twice before selling exchange-traded crypto-tracking products to average consumers. The Financial Supervisory Authority in Stockholm said it will take action against companies that sell the risky, complex instruments to retail investors who don’t understand what they’re getting into. Sweden is home to the largest Bitcoin exchanged-traded product: The $1.7 billion Bitcoin Tracker EUR. Bloomberg Link


SIX is taking a majority stake via growth investment in Orenda Software Solutions (Orenda), a Canadian-based AI platform specialising in ESG and alternative data sets. This step is part of the strategy of SIX to help its customers drive more insights with data, providing consumption-ready data and analytics for faster and more informed decisions. The transaction is expected to close in the first quarter of 2021. Link


Cannabis stocks have been on a roll this year, with rising expectations for full federal legalisation in the US pushing many marijuana-related equities to new highs. But investors in the burgeoning array of exchange traded funds tracking the sector are being warned to ensure they understand exactly what it is they are buying. Even some ETF managers are raising red flags. FT Link

Morningstar found assets in active and passive gender funds more than quadrupled to $3bn globally over the three years to the end of January but collectively underperformed their respective wider capitalisation-weighted benchmarks. FT Link


If you have you ever wondered how new products get to see the light of day and who is the chef behind the kitchen walls, make sure to read our recent piece in ETF Stream highlighting the world of ETF product development. Link


In case you missed it…

A University of Michigan library was forced to close for two days after venomous recluse spiders were found in the building. One of the librarians told a reporter: "The Mediterranean recluse is one of these cosmopolitan species, it hitchhikes with people throughout the world. It's been found in 22 states…they don't have a huge amount of venom, but they have enough to start necrosis, which is the eating away of the flesh." How rude.


Thank you for reading and have a great week!


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