The SEC to Review Revenue Sharing in the U.S.
In the U.S., the Securities and Exchange Commission’s enforcement division, SEC has launched an investigation on revenue sharing between ETF issuers and intermediaries.
And a busy week of global ETF launches including the first spot Bitcoin and Ethereum ETFs to launch in Australia.
Fund Launches and Updates
Amundi has launched the Amundi Global AGG SRI – Ucits ETF DR and Amundi MSCI AC Far East Ex Japan ESG Leaders Select – Ucits ETF DR. Both ETFs are listed on the Deutsche Borse Xetra and are Article 8 compliant under SFDR. Citywire Link
Bitpanda has launched the Bitpanda Cardano ETC, Bitpanda Ether ETC, Bitpanda Polkadot ETC and the Bitpanda Solana ETC. All four are listed on Boerse Frankfurt and Deutsche Boerse with TERs of 1.49%. ETF Stream Link
DWS has launched the Xtrackers Harvest MSCI China Tech 100 UCITS ETF (XCTE) which is listed on the LSE and the Deutsche Boerse with a TER of 0.55%. ETF Stream Link
ETC Group has launched the XRPetc – ETC Group Physical XRP (GXRP) in partnership with HANetf. The new ripple ETP is listed on the Deutsche Boerse with a TER of 1.95%. Link
First Trust has launched the First Trust Nasdaq Clean Edge Smart Grid Infrastructure UCITS ETF (GRID) which is listed on the London Stock Exchange and Deutsche Boerse with a TER of 0.70%. ETF Stream Link
Global X has launched the Global X Uranium UCITS ETF. The new ETF has been listed on London Stock Exchange in US dollars (URNU LN) and pound sterling (URNG LN) as well as on Deutsche Börse Xetra in euros (URNU GY). ETF Strategy Link
HANetf will be launching the Electric Vehicle Charging Infrastructure Equity UCITS ETF (ELEC) which will list on the London Stock Exchange, Deutsche Boerse and Borsa Italiana. TER of 0.65%. ETF Stream Link
HSBC Asset Management has launched the HSBC Europe ex UK Sustainable Equity UCITS ETF (HSXU) listed on the London Stock Exchange with a TER of 0.15%. ETF Stream Link
WisdomTree has launched the WisdomTree Battery Metals ETC (WATT) and the WisdomTree Energy Transition Metal ETC (WENT). Both ETCs are listed on the London Stock Exchange, Borsa Italiana and Deutsche Boerse with total expense ratios of 0.45%. ETF Stream Link
Matthews Asia has filed to launch a trio of active ETFs which will be a first for the firm. The filing lays the groundwork for the firm to launch the Matthews Emerging Markets Equity Active ETF, Matthews Asia Innovators Active ETF and Matthews China Active ETF. All three ETFs would come with management fees of 0.79%. Link
Effective July 15th, Principal Global Investors is planning to convert its largest ETF and five others into actively managed strategies. The manager intends to overhaul the investment strategies of its $1.6bn Principal US Mega-Cap ETF, $771mn Principal US Small-Cap Multi-Factor ETF, $235mn Principal Value ETF, $86mn Principal Quality ETF, $71mn Principal Healthcare Innovators ETF and $27mn Principal Millennials ETF. FT Link
Roundhill Investments debuted the Roundhill Cannabis ETF (ticker WEED) on April 20 -- a date widely regarded as a marijuana holiday – and apparently waited 8 months to get that specific date. Smart marketing. Bloomberg Link
Full List of U.S. ETF Launches:
According to a breaking news story from Coindesk, the highly anticipated spot crypto launches from 21Shares and ETF Securities and Cosmos Asset Management in Australia have been delayed 24 hours prior to launch. Below are the expected products which have been delayed and awaiting word from the exchange. Coindesk Link
21Shares AG and ETF Securities are launching the ETFS 21Shares Bitcoin ETF and ETFS 21Shares Ethereum ETF in Australia. Both funds were expected to go live on April 27 and list on the CBOE Exchange (formerly Chi-X). PR Newswire Link
The Cosmos Asset Management’s Bitcoin ETF was also scheduled to be listed on the Australia Cboe equities trading platform on the same day. The Cosmos fund invests in crypto through the Purpose Bitcoin ETF that listed on the Toronto Stock Exchange last November. Coindesk article
Fund Flows and Trading Volume
Detlef Glow reported quarterly ETF flows for Europe which saw an added +€38.3 bn outpacing the flows into passive index mutual funds of €17.6 bn through March 2022. European ETF AUM increased to €1.33tn and equity ETFs posted the highest estimated net inflows in the European ETF industry with +€30.1 billion for Q1 2022.
The best-selling Lipper global classification for Q1 2022 was Equity US (+€10.1 billion), followed by Equity Global (+€10.1 billion) and Bond USD Government (+€4.4 billion).
iShares was the best-selling ETF issuer for Q1 2022 with €16.3 billion added, followed by Amundi with +€8.6 billion and Invesco with +€4.0 billion. Refinitiv Link
In the US, the SEC’s enforcement division has launched a sweep of ETF revenue-sharing practices. According to the FT article, the SEC is requesting line-by-line details about revenue-sharing payments for each ETF and each intermediary. Morgan Stanley Wealth Management, for example, said in a disclosure that it intended to charge revenue-sharing fees to sponsors of actively managed ETFs but not passive ones.
In addition, ETF providers can also sponsor meetings and conferences for Morgan Stanley financial advisers, paying up to $300,000 a year. ETF managers can further pay up to $700,000 a year for data analytics on product sales. MS is not alone here and ETF issuers paying for holder data is not new or necessarily scandalous as it is paid by the firm and doesn’t come out of the fund itself. LPL Financial said it received up to $600,000 a year in exchange for access to data analytics and other information. FT Link
According to a Nasdaq survey of 500 US-based financial advisers, 72% responded that they would invest more into the bitcoin and broader cryptocurrency sector if a bitcoin spot ETF was approved. Among advisers already investing in crypto, 86% expect to increase their allocations over the next 12 months. Of the same group, 50% are already using Bitcoin futures ETFs and 28% plan to start using them in the next 12 months. On average, advisers currently or considering investing in crypto state that their ideal crypto allocation is 6% of a client’s total portfolio. Nasdaq Link
Investment platform Scalable Capital has created a foothold across Europe with operations in Germany, France, Spain, Austria and the UK (albeit on a smaller scale), and now has its sight on Italy with their most launch. Scalable is well-versed in retail investor growth opportunities and will be offering Italian investors access to its commission-free trading platform, savings plans and its just-launched crypto investments.
According to the ETF Stream article, Scalable has seen the number of retail investors in Germany with ETF savings plans soar to 4.9 million, up from 1.9 million at the end of 2019. And they expect this phenomenon to spread to the rest of Europe as retail investors become more comfortable with ETFs. ETF Stream Link
Hashdex announced that it has received approval from the SIX Swiss Exchange to list ETPs in Switzerland. As the largest crypto asset manager in Latin America, Hashdex’s entry into the Swiss Crypto Valley will accelerate the company’s international reach and the announcement builds on Hashdex’s ongoing international expansion as they actively recruit growing teams in London, Zurich, Paris, and Lisbon to support the firm’s global expansion. Global Newswire Link
AJ Bell launches its commission-free investment app for UK investors offering ETFs. ETF Steam Link
Patent for unique tax-efficient fund structure at Vanguard expires next year, but other issuers may not be able to replicate their strategy. FT Link
The Teucrium Bitcoin Futures ETF now carries the Hashdex name. Blockworks Link
Grayscale Puts Further Pressure on US SEC to Approve Spot Bitcoin ETF. Coinspeaker Link
UC Investments, the University of California's investment arm, has made a commitment of $300 million to two State Street Global Advisors climate-related exchange-traded funds. P&I Daily
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.