Record Breaking Inflows Reported Globally
The party continues as global ETF inflows surpass a record $1trillion as of the end of November jumping last year’s total of $735.7 billion.
It’s safe to assume that the record number of ETF launches and mutual fund to ETF conversions helped drive those numbers and even though we are approaching the end of the year there certainly has been no slowdown on either front.
Fund Launches and Updates
21Shares is listing the first two physically backed products on Nasdaq Stockholm with Bitcoin (Ticker: ABTC) and Ethereum (Ticker: AETH) as underlying assets. As of November, 21Shares managed USD2.9 billion in 20 European crypto ETPs and 82 listings. Link
Global X launched the following additional thematic ETFs on the LSE: the Global X Renewable Energy Producers UCITS ETF (RNRG), Global X Clean Water UCITS ETF (AQWA), Global X Data Center REITs & Digital Infrastructure UCITS ETF (VPN) and Global X Lithium & Battery Tech UCITS ETF (LITU). Link
Invesco has launched the following new ETFs - the Invesco MSCI World ESG Climate Paris Aligned UCITS ETF, Invesco MSCI USA ESG Climate Paris Aligned UCITS ETF, Invesco MSCI Europe ESG Climate Paris Aligned UCITS ETF and Invesco MSCI Japan ESG Climate Paris Aligned UCITS ETF. Ongoing charges ranges from 0.09% to 0.19%. Link
Leverage Shares is launching leveraged and inverse ETPs on 3 of Cathie Woods ARK ETFs on Euronext and the London Stock Exchange today. The launches are among 42 ETPs that Leverage Shares intends to list on the LSE, a single-day record, surpassing the prior record of 28 set by the same issuer last year. Others due to launch include long and short versions of blue-chip healthcare, airline and financial stocks, such as Moderna, Airbus and Berkshire Hathaway. Link Full list of fund names here.
LGIM has closed the L&G Longer Dated All Commodities ex-Agriculture and Livestock UCITS ETF (XAGS) after its clients called for more diverse exposure and assets fell to just over $1m. Link
Northern Trust Asset Management has launched the FlexShares Listed Private Equity UCITS ETF (FLPE) on Euronext Amsterdam with a total expense ratio of 0.40%. Link
Ossiam will be launching a range of 5 passively managed equity PAB (Paris Aligned Benchmark) ETFs. The ETFs are exposed to the following markets: EMU, Europe ex EMU, US, Japan and Canada.
WisdomTree has launched a genetics and biotechnology revolutions ETF that incorporates ESG metrics. The WisdomTree BioRevolution UCITS ETF (WDNA) is listed on the London Stock Exchange and Deutsche Boerse with a total expense ratio of 0.45%. Link
Missed in the list below is the Direxion mRNA ETF (MSGR) which launched last week and provides exposure to companies that are leading the development and application of messenger RNA technology. Expense ratio is 65bps and tracks the BITA Messenger RNA Technology Index (BMRNAIN) which provides exposure to the performance of companies, publicly listed in the United States, Canada and Europe, that are leading the development and application of messenger RNA (“mRNA”) technology. Link
Full list of U.S. launches
CSOP Asset Management Limited listed the CSOP MSCI China A 50 Connect ETF on the Hong Kong Stock Exchange on 13 December 2021. Link
Mirae Asset Global Investments (Hong Kong) listed the Global X FinTech ETF, Global X Autonomous and Electric Vehicles ETF, and Global X Asia Innovator Active ETF on the Hong Kong Stock Exchange. This brings the total number of Global X ETFs offered in Hong Kong to 24 products, representing assets under management of US$2.68 billion. Link
Globally, 2021 inflows into ETFs crossed the $1 trillion mark for the first time at the end of November, surpassing last year’s total of $735.7 billion. The combination of massive inflows and positive markets have pushed global ETF assets to nearly $9.5 trillion, more than double where the industry stood at the end of 2018. As usual, most of that money has gone into U.S. funds run by Vanguard, BlackRock and State Street which together control more than three-quarters of all U.S. ETF assets. Link
According to a recent Refinitiv morning note, the European ETF industry enjoyed estimated net inflows for November (+€13.5 bn) bringing the estimated total to €151.1 bn for 2021 so far. The inflows in the European ETF industry for November were driven by equity ETFs (+€8.5 bn), followed by bond ETFs (+€4.8 bn), alternative UCITS ETFs (+€0.2 bn), and mixed-assets ETFs (+€0.1 bn). Link
According to a regulatory filing, Santander is preparing to launch a pure-play robo-adviser with SigFig, a digital adviser and technology provider. The robo, Santander PathFinder, will create ETF based model portfolios which will then be recommended to clients based on their risk tolerance profile. SigFig will also be responsible for implementing and managing the robo’s model portfolios, monitoring and rebalancing portfolios as needed, and will oversee the operation of the robo’s algorithms. This is not their first banking arrangement as SigFig works on robo products with financial institutions such as Wells Fargo and UBS. Link
BlackRock announced that it has entered into agreements with BNY Mellon, Citi, and JP Morgan to join State Street as post-trade service providers for iShares’ $2.3 trillion in U.S.-domiciled exchanged traded funds. The announcement culminates a nearly two year-long due diligence process and the transition of any U.S. iShares ETF assets to the new providers is projected to take 18 months to complete. Link Given the recent article likening custody banks to plumbers (who by the way, also make a ton of money) it wouldn’t surprise us to know that most underestimate the length of time a due diligence process can take and even the transition. More on the money making side within the additional reads below.
HSBC Asset Management has announced the creation of ETF & Indexing, which brings together all of the firms’ passive funds, mandates and solutions under a single umbrella. The bank writes that the creation of ETF & Indexing reflects the strategic importance of passives to the business and will result in an improved product and service offering for clients. It follows the strong growth of the firm’s ETF, index and systematic fund range, with passive assets AUM growing to $103 billion through the end of September 2021, including $18 billion in ETFs. Link According to a recent Citi report, in the US, investment advisers have eclipsed retail traders to become the largest owners of US exchange traded funds. Nearly two-fifths of US-listed ETFs are now owned by investment advisers whereas five years ago, this figure stood at a little over 35 per cent. Wealth managers own 12.7 per cent, with other institutions, such as insurers and pension funds, holding a further 8.8 per cent. Over the same timeframe, retail ownership of US-listed ETFs has fallen from 40 per cent to 38.9 per cent. Link
In the US, $402 billion money manager Neuberger Berman Group LLC is throwing its hat into the $8 trillion ETF arena, joining a year of record launches and inflows. The firm recently filed three funds with the SEC and if launched, the Neuberger Berman Carbon Transition Infrastructure ETF, the Neuberger Berman Disrupters ETF and the Neuberger Berman Next Generation Connected Consumer ETF would be the firm’s debut products. Link
Additional Interesting reads:
Amundi plans to almost double the number of ESG ETFs in its range by 2025. Link
Great article by Keshava Shastry on the need for a consolidated tape in Europe. Link
Truly disrupting the Swiss bank model is SEBA Bank, a three-year old fully licensed Swiss bank, focused entirely on the cryptocurrency space. Link
These ETFs Generate the Most Revenue Link
Direct Indexing should be seen as another tool in the toolbox complement to ETFs Link
More mutual fund conversions as 2 Motley Fool Mutual Funds Convert to ETFs Link
Custody banks may be dubbed the “world’s worst oligopoly” because of their inability to raise prices. But that does not make them any less profitable. Link
The $4.7 billion EWY marks 11th straight week of withdrawals Link