• Andrea Murray

Who’s Next on the Crypto Bandwagon?

Updated: 3 days ago


An exciting list of European ETP launches including 21Shares and a long lineup of thematic ETFs from Global X solidifying their dedication to the European market. In the U.S., Dimensional has launched their first active transparent fixed income ETFs ahead of the Thanksgiving week and not surprisingly, more of the big ETF issuers have confirmed that they too are looking to jump on the crypto bandwagon. Read on for more ETF and Digital Assets highlights from the week.


Fund Launches and Updates


EUROPE

21Shares has launched Europe’s first polygon, avalanche and algorand ETPs. The 21Shares Polygon ETP (POLY), the 21Shares Avalanche ETP (AVAX) and the 21Shares Algorand ETP (ALGO) are listed on the SIX Swiss Exchange with total expense ratios of 2.5%. It takes the number of crypto ETP launches by the issuer to 20. Link

Amundi has expanded its ESG ETF range with the addition the Amundi MSCI Emerging ex-China ESG Leaders Select UCITS ETF DR and the Amundi MSCI China ESG Leaders Select UCITS ETF DR. Listed on the London Stock Exchange, they are classified as Article 8 and each ETF has an ongoing charge of 0.35%. Link

DWS is set to switch the index on Xtrackers Global Aggregate Bond Swap UCITS ETF (XBAG) to one that tracks ESG metrics. As a result, XBAG will change its names to Xtrackers ESG Global Aggregate Bond UCITS ETF under the same ticker and total expense ratio of 0.15%. Link


Global X has expanded with the launch of seven thematic ETFs. Physically-replicated, the seven ETFs are listed on the London Stock Exchange, Deutsche Boerse and Borsa Italiana with total expense ratios of 0.50% barring two ETFs – fintech and IoT – which charge 0.60%.


The ETFs are:

Global X Autonomous & Electric Vehicles UCITS ETF (DRVE)

Global X CleanTech UCITS ETF (CTEK)

Global X Cybersecurity UCITS ETF (BUG)

Global X E-commerce UCITS ETF (EBIZ)

Global X FinTech UCITS ETF (FINX)

Global X Internet of Things UCITS ETF (SNSR)

Global X Robotics & Artificial Intelligence UCITS ETF (BOTZ)

Link


HSBC Asset Management has unveiled its first fixed income ETFs with the launch of the HSBC Bloomberg EUR Corporate Sustainability Bond UCITS ETF (HEUC) and the HSBC Bloomberg USD Corporate Sustainability UCITS ETF (HUSC). Both ESG ETFs are listed on the London Stock Exchange with a total expense ratio of 0.18%. Link


Iconic Funds has become the latest issuer to implement a carbon offsetting initiative for its bitcoin exchange-traded product. The Iconic Funds Physical Bitcoin ETP (XBTI) is listed on the Deutsche Boerse with a total expense ratio of 0.95%. Link

VanEck is seeking the approval of investors to switch the index of its US equity ETF to one that tracks ESG metrics. Under the proposed changes, the $573m VanEck Vectors Morningstar US Wide Moat UCITS ETF (MOAT) would move from tracking the Morningstar Wide Moat Focus index to the Morningstar US Sustainability Wide Moat Focus index. Link


THE AMERICAS

Dimensional Fund Advisors listed the company’s first four active transparent fixed income ETFs and filed a preliminary registration statement for 10 more equity ETFs. Link


Global X ETFs announced the launch of the Global X Blockchain & Bitcoin Strategy ETF (BITS). The fund will be actively managed and among the first ETFs designed to provide access to both bitcoin futures as well as companies positioned to potentially benefit from advances in blockchain technology. Link


Full list of U.S. launches last week:


Source: Link


Flows


Recent Morningstar data shows that all of the UBS ETF net inflows this year have been into sustainable products, while its other ETFs have seen aggregate net outflows. UBS Asset Management said its sustainable product range was “really where the growth is”, adding that the sales trend had been driven by switching from other funds as well as new money. The index switching trend has certainly been popular this year and almost mentioned in all of our newsletters in 2021.


Looking at the numbers, UBS has seen net inflows of $9.8bn to its European ETFs YTD, including $10.2bn of net flows into sustainable investment products. Interestingly, at none of the other eight largest ETF firms do aggregate flows into sustainable products outweigh flows to other products to the extent seen at UBS. Link


One ETF shows how investors are increasing bets on a rebound in Chinese property junk bonds. Surging inflows have lifted total assets of the iShares USD Asia High Yield Bond Index ETF to $1.87 billion from $383 million at the end of August, an increase of 388%. In October alone, the fund attracted a record $773 million. Link


Noteworthy


Well, this is not shocking to anyone – where the money flows, everybody goes. Fidelity, UBS and State Street Global Advisors have confirmed that, like rivals BlackRock and Invesco, they are looking into launching products that offer exposure to cryptocurrencies. Assets in European ETPs and mutual funds with cryptocurrency exposure have topped €10.5bn. XBT, part of CoinShares, is the largest provider in Europe, with assets of €5.4bn across eight products domiciled in Sweden and Jersey, followed by Swiss group 21Shares, which manages €2.1bn across its range. Link


Metaverse stock fans are finding that South Korea is a go-to Asian market to bet on the technology. Aside from the popular U.S.-listed Roundhill Ball Metaverse ETF, most other vehicles focused on the concept are hosted in South Korea, according to Bloomberg-compiled data. “South Korea is the fastest-growing metaverse ETF market globally, reaching $100 million in assets in just under two weeks,” said Bloomberg Intelligence analyst Rebecca Sin. Link


A lesson for the retail community – always look under the bonnet. The performances of two rival “work from home” themed funds launched in 2020 have diverged wildly this year. Direxion started a “work from home” product in late June 2020 under the ticker, WFH and BlackRock followed three months later with a “virtual work and life” ETF under the ticker, IWFH. The two funds appear nearly identical at first glance but WFH has risen 58 per cent since its launch and BlackRock’s IWFH, in contrast, is up just 4 per cent since its debut. The disparity reflects their holdings: WFH’s $115m portfolio is heavy on stocks of businesses that enable working from home such as remote communications, cloud computing and online project management. The $5m IWFH has suffered from exposure to more consumer-oriented businesses such as streaming services, food takeout and video game publishing, which point to the “life” part of its name. Link

Additional interesting reads:


According to BlackRock’s Samara Cohen, traders are pointing portfolio managers towards ETFs in a bid to add fixed income exposure and replace derivatives. Link


WisdomTree is looking to bring more crypto products to investors in 2022 while also focusing on how blockchain can change the financial world more broadly. Link


US mutual fund asset managers are eyeing up the ETF space says Foreside Link


Invesco’s surprise decision to abort the launch of a bitcoin futures exchange traded fund in the US was partly prompted by its view that regulatory constraints would make it too costly for investors. Link


Fidelity Clearing Canada ULC (FCC) has become Canada’s first regulated entity to offer bitcoin custody and trading services for institutional investors. Link


State Street Alpha forms strategic partnership with RIMES to enhance index and benchmark services Link


Melanion Capital responds to Swedish call for EU ban on proof of work cryptocurrency mining Link


SFDR labelled funds ‘vary widely’ across Europe, EFAMA finds Link


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.

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