The Weekly ETF Roundup: w/e June 19, 2020 - Global ETP inflows of $45.8 billion in May
Updated: Jul 20
Global equities rose last week as investors reacted to news of additional government stimulus and central bank support. European markets were positive with an increase in the FTSE 100 of +3.08%, the FTSE 250 +3.65%, Stoxx Europe 600 +3.30% and the DAX +3.19%. U.S. equities were up +1.88% for the same period.
The CBOE Volatility Index dropped -2.69% for the week and closed Friday at 35.12.
WTI Crude oil closed on Friday at $39.75 a barrel, up 9.62% for the week.
Ossiam recently launched the Ossiam Euro Government Bonds 3-5Y Carbon Reduction UCITS ETF 1C (EUR), on Xetra. The fund launched with €200 million of seed capital, is denominated in Euros and has a TER of 17bps.
Flows and Performance:
Based on the recent BlackRock iShares report, global ETP inflows were $45.8 billion in May, down from almost $69 billion in April. Assets invested in global ETPs increased to $6.10 trillion from $5.84 trillion in April.
Locally, figures released from Lipper showed net inflows for May of +€5.3 billion bringing overall assets under management to €798.7 billion. Inflows were driven by bond funds +€6.4 bn, whilst equity ETFs faced outflows of -€1.2 bn. iShares was the best-selling ETF promoter in Europe for May +€4.0 bn, ahead of JPMorgan +€0.6 bn and UBS ETF +€0.4 bn. Noteworthy:
Ireland is aiming to migrate remaining ETF issuers to an international issuance and settlement model before 2021. More than 90% of ETF assets in Ireland have already migrated. The structure allows ETF shares to be created and settled centrally through the ICSDs Clearstream or Euroclear rather than through individual domestic CSDs. Ciaran Fitzpatrick, Head of ETF Servicing at State Street, is quoted as saying: “If we can get every issuer in Ireland into the model by the end of 2020, it would be a significant milestone and would contribute to creating a more centralised and automated market with greater volume and liquidity and a reduction in settlement failures.” Source: Funds-Europe
~The largest oil ETF, USO, was cleared by the SEC to issue 1 billion new shares, creating an opportunity for renewed investments into the popular retail product that’s been at the center of controversy in recent months. With $4.89bn in AUM, USO is down 72.4% this year whilst West Texas Intermediate crude is down only approximately 40% for the same period. Restrictions from various regulators and brokers from tracking just the front-month futures contract certainly did not help matters. Comparatively, Europe’s largest oil ETF, the WisdomTree WTI Crude Oil ETF, ticker CRUD, is down 57.7% for the same period and ended last week with $2.42bn in AUM. Source: Bloomberg
~Last week ETF Stream unveiled its second annual ‘Industry 30’ highlighting the 30 industry players who had the biggest impact on the European ETF ecosystem last year. Details here: https://www.etfstream.com/news/11747_etf-stream-unveils-industry-30-2020/
Fund in Focus:
Last week, we mentioned the newly launched US-listed Roundhill Sports Betting & iGaming ETF (BETZ) which saw impressive trading during its first week of launch. It prompted us to look at what is available in Europe bringing us to our first ever “Fund in Focus”* -- the VanEck Vectors Video Gaming and eSports UCITS ETF, ticker ESPO.
The VanEck Vectors Video Gaming and eSports UCITS ETF, ticker ESPO, tracks the MVIS Global Video Gaming & eSports Index, which is a global index that includes companies with at least 50% (25% for current components) of their revenues from video gaming and/or esports. Source: https://www.vaneck.com/ucits/etf/equity/espo/overview
As of Friday, assets under management are at $360.65 million, which is impressive given the fund just crossed the €100 million AUM mark at the end of April 2020. YTD, ESPO has a positive return of +33.4% and since its launch in June 2019, the fund has returned 59.8%. TER is 0.55%.
On the Lighter Side:
Whoops! Who left $191,000 worth of gold bars on a Swiss train bound for the lakeside city of Lucerne last year? And who travels around with that much gold anyway? The forgotten booty was confiscated by the canton's prosecutor's office, which gives a person five years to prove ownership. To date, no one has stepped up to claim it. Source: Bloomberg
Fund Performance and Flows (data sourced from ETFLogic):
Top 3 Best Weekly Performers in the UK
WisdomTree WTI Crude Oil – GBP Daily Hedged +10.25%
WisdomTree Brent Crude Oil – GBP Daily Hedged +9.58%
WisdomTree Brent Crude Oil +9.56%
Top 3 Worst Weekly Performers in the UK
WisdomTree Brent Crude Oil 1x Daily Short -8.92%
WisdomTree Cocoa -2.53%
WisdomTree Short JPY Long GBP -1.73%
Top 3 Weekly UK Inflows
Xtrackers MSCI USA Banks UCITS ETF +$358.6m
iShares JP Morgan USD EM Bond UCITS ETF (Acc) +$291.3m
Lyxor US Tips DR UCITS ETF Monthly Hedged GBP -Dist +$287.2m
Top 3 Weekly UK Outflows
WisdomTree WTI Crude Oil – GBP Daily Hedged -$325.8m
WisdomTree Brent Crude Oil – GBP Daily Hedged -$29.7m
iShares MSCI Europe Mid Cap UCITS ETF EUR (Acc) -$17.9m
*Fund in Focus or any portion of this newsletter are informational only and not intended to provide recommendations of any kind.