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The Weekly ETF Roundup: w/e May 17, 2020 - China’s ETF market crosses the $100 billion mark

Updated: Jul 20

Overall Markets:

European markets were down last week with a decrease in the FTSE 100 of 2.2%, Stoxx Europe 600 -3.28% and the DAX -3.32%. U.S. equities were down 2.22% for the same period.

Spot VIX is down 14.25% for the first two trading weeks of May and closed Friday at 31.89.

WTI Crude June contracts saw an increase of 21.91% for the week closing Friday at $29.43 a barrel.

ETF Launches/Updates:

Rize ETF has registered its two thematic products in four additional European countries. The Rize Cybersecurity and Data Privacy UCITS ETF (CYBR) and the Rize Medical Cannabis and Life Sciences UCITS ETF (FLWR) are currently listed on the LSE and the DAX but can now be passported into the Netherlands, Denmark, Sweden and Finland.

CYBR and FLWR were launched earlier this year in February and have a total expense ratio of 0.45% and 0.65%, respectively. CYBR has grown to $8.85m and FLWR has $900k in assets.

The UBS ETF - J.P. Morgan CNY China Government 1-10 Year Bond UCITS ETF will provide direct access to renminbi-denominated bonds through listings on the Deutsche Börse, the SIX Swiss Exchange and the Borsa Italiana, and has a TER of 0.33%.

Noteworthy Topics:

China’s ETF market crossed the $100 billion-mark last week, a record high since the first ETF product was launched 15 years ago. Year-to-date, 48 new ETFs have launched bringing the total number of ETF products in the China market to 306.

Last week ETF Express reported that the BoE Financial Stability Report showed that secondary market ETF pricing held up better than open-ended fund pricing during the worst of the market volatility in March. During that period, the BoE observed that price discovery often occurred via ETFs rather than their underlying assets.

European policy makers may roll back a signature piece of securities legislation. By relaxing the MiFID II rulebook, they hope to encourage firms to invest, trade and tap public markets to raise funds. The new rules overhauled everything from broker fees to reporting requirements since being introduced in 2018, but industry groups have long bemoaned the expense and paperwork. Source: Bloomberg

The Fed started buying bond ETFs this past week. As Bloomberg news reported, some view that fixed-income ETFs not only survived March volatility but emerged as heroes. The argument goes that, since the underlying bonds were not trading much, ETFs became the best tool for price discovery. In other words, ETF prices were "right."

Fund Performance and Flows (data sourced from ETFLogic):

Top 3 Best Weekly Performers in the UK

WisdomTree WTI Crude Oil 1Yr +26.60%

iShares Physical Silver ETC +9.27%

Invesco Physical Silver ETC + 8.90%

Top 3 Worst Weekly Performers in the UK

Invesco Real Estate S&P US Select Sector UCITS ETF -7.42%

Lyxor S&P 500 banks UCITS ETF – Acc -7.19%

iShares UK Property UCITS ETF GBP (Dist) -7.12%

Top 3 Weekly UK Inflows

iShares Physical Gold ETC $188.1M

iShares High Yield Corp Bond UCITS ETF EUR (Acc) $62.5m

iShares USD Treasury Bond 20+ Year UCITS ETF (Acc) $45.4m

Top 3 Weekly UK Outflows

iShares Core MSCI World UCITS ETF GBP HDGD (Dist) -$100.6m

WisdomTree Brent Crude Oil – GBP Daily Hedged -$78.1m

iShares UK Property UCITS ETF GBP (Dist) -$62.5m

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