The Weekly ETF Roundup: w/e December 18, 2020 – Global X Breaks into the European Market
This is a weekly newsletter of what we have seen in the world of ETFs and thought was interesting. If you like what you read, feel free to spread it around.
Fund Launches and Updates
Amundi launched a new currency hedged ETF – the Amundi Index MSCI World SRI UCITS ETF DR - hedged EUR (C) – on Xetra and Börse Frankfurt.
DWS has become the latest ETF issuer to change the index of an equity ETF to one that incorporates ESG metrics. The $36.8m Xtrackers FTSE All-Share UCITS ETF (XASX) has been renamed the Xtrackers MSCI UK ESG UCITS ETF under the same ticker. Along with the change of index, the German ETF issuer has dropped the total expense ratio by two basis points to 0.18%. ETF Stream Link
UBS Asset Management has partnered with MSCI in developing custom built low carbon indices for its entire socially responsible investment (SRI) range. Effective December, UBS SRI ETFs will track the new MSCI SRI Low Carbon Select 5% Capped indices which implement additional exclusion criteria compared to the previous SRI indices. Link
Vanguard launched eight new active LifeStrategy ETFs on Xetra and Börse Frankfurt. The new funds allow investors to invest in an actively managed portfolio of equity and fixed income ETFs, including companies and bonds from both developed and emerging markets, without a regional or sector focus. Link
The best-selling Lipper global classification for November was Equity Global (+EUR5.6 billion), followed by Equity Emerging Markets Global (+EUR1.3 billion) and Equity China (+EUR1.1 billion). iShares was the best-selling ETF promoter in Europe for November (+EUR7.7 billion), ahead of UBS ETF (+EUR2.8 billion) and Xtrackers (+EUR2.3 billion).
The 10 best-selling funds gathered total net inflows of EUR6.5 billion for November, and the best-selling ETF for November, was UBS (Irl) Fund Solutions plc - MSCI ACWI SF UCITS ETF (HUSD) A-acc, accounted for net inflows of EUR1.1 billion. Link
Mutual Funds bleed $469 Billion as ETFs bring in roughly $427 billion this year, divided almost evenly between equity and fixed-income funds, according to Bloomberg Intelligence data. Bloomberg Link
MSCI announced it will follow Nasdaq, FTSE Russell and S&P on exclusions of Chinese military-linked companies from indices. FT Link
Cut-throat price competition among tracker fund providers is fuelling the war on fees across Europe’s investment industry with active managers joining their passive counterparts in axing fees to attract new investors and retain existing clients. Fees for exchange traded funds have fallen by 30 per cent over the past three years while index-tracking mutual fund fees have dropped by about 35 per cent. FT Link
Today, 21st December, Tesla joins the S&P 500 index at over $600 a share. Tesla joined the Russell 1000 stock index back in September 2010, priced at just $4.40 a share, and zoomed into the rival Nasdaq 100 benchmark in July 2013, when it was trading at $26 a pop. It is now the sixth-largest constituent in each with a market capitalisation of $606bn. FT Link
A possible acquisition of Lyxor, a predominantly passive player with €157bn in assets, could propel Amundi into the position of Europe’s second-largest ETF provider, making it better placed to compete with BlackRock. With $72.8bn in ETF assets, Amundi lags far behind BlackRock, which has $532bn in Europe alone, according to ETFGI. FT Link The Investment Association announced that ETFs will become part of the IA sectors fund classification scheme on 19 April 2021. This will help investors more easily find and compare the full range of funds available to them. The IA will also be creating 14 new bond sectors at the same time - Government Bond (USD, EUR, Global), Global Inflation Linked Bond, Corporate Bond (USD, EUR, Global), Mixed Bond (USD, EUR, Global), High Yield Bond (USD, EUR, Global) and Specialist Bond. IA Press Release
Fund in Focus
Europe’s top financial regulators put the finishing touches on new recommendations allowing the region’s strongest banks to restart dividend payments within strict limits, ending a nine-month hiatus imposed due to the coronavirus crisis. Three people briefed on the discussions said the ECB was preparing to propose stricter limits on banks’ renewed dividend payments than those outlined by the Bank of England, which lifted its ban on shareholder distributions in the sector last week. FT Link
This brings us to our fund in focus, the Fidelity Global Quality Income UCITS ETF, primary ticker FGQI. Incepted in March 2017, the fund's objective is to provide investors with a total return, taking into account both capital and income returns, which reflects, before fees and expenses, the return of the Fidelity Global Quality Income Index. TER is 0.40% and assets under management are $345m, YTD performance +7.24%.
In case you missed it, Mike published an interesting read highlighting the “glamorous side” of asset servicing within the ETF ecosystem. Check it out here.
Thank you for reading. We are taking a break next week but will see you back at the beginning of 2021. Happy holidays!