• Andrea Murray

Will Australia Be Next to Enter the ETF Crypto World?



Bitcoin ETFs are still very much in the news and will continue to be with Australia entering the space and even a leverage and inverse filing in the US.

ESG was also a popular topic last week with a number of ETF launches in Europe and index switches announced. And truly a case of buyer beware, one ETF ticker is benefiting from the Facebook name change. Read on for more ETF highlights from the week.


Fund Launches and Updates


EUROPE

BlackRock has partnered with MSCI to change the methodology of its ESG enhanced ETF range to incorporate the European Union’s Climate Transition Benchmark. Effective 1 December, the $9bn six-strong ETF range will track MSCI climate indices that are aligned to the Paris Agreement’s 1.5°C trajectory and will be classified as Article 9 instead of Article 8. Link


Invesco has launched Europe’s first Nasdaq 100 ETF with ESG metrics (they also launched the same product in the U.S.). The Invesco Nasdaq-100 ESG UCITS ETF (NESG) is now listed on the London Stock Exchange with a total expense ratio of 0.25%. Link


LGIM has launched the first European ETF to offer exposure to the Indian government bond market in its local currency. The L&G India INR Government Bond UCITS ETF (TIGR) will be listed on the London Stock Exchange, Deutsche Boerse and Borsa Italiana with a total expense ratio of 0.39%. Link


UBS is switching the index on its UBS Fund Solutions MSCI China ESG Universal UCITS ETF (UETC) to the MSCI China ESG Universal Low Carbon Select 5% Issuer Capped Total Return Net index. Link


Valour is set to launch the world’s first ETP tracking the token of the decentralised exchange Uniswap. Physically backed, the Valour Uniswap ETP will list on the Boerse Frankfurt with a total expense ratio (TER) of 1.9%. Link



THE AMERICAS

Yet another race to the finish line - in just one week from the first futures-based bitcoin launch, firms are already lining up for short and leveraged versions. On Tuesday last week, Valkyrie, which was second to market with a futures-based Bitcoin fund, filed an application with the SEC to launch the Valkyrie XBTO Levered BTC Futures ETF, which would trade under the ticker BTFX. The fund would enhance returns by delivering 1.25 times the reference price of Bitcoin, according to a filing.

On the other end, Direxion has filed the Direxion Bitcoin Strategy Bear ETF which looks to short the price of a bitcoin futures contract. Link


An ETF marketed to take the other side of Cathie Wood’s trades has decided against name-dropping her firm’s flagship Ark Innovation fund. The not-yet-launched Short ARKK ETF will be changing its name to the Tuttle Capital Short Innovation ETF, though it’s keeping the ticker SARK. Link


In Canada, Horizons ETFs Management has launched the Horizons Global Vaccines and Infectious Diseases Index ETF (HVAX) and the Horizons North American Infrastructure Development Index ETF (BLDR). Link

Additional U.S. launches last week:

Source: Link


ASIAPAC

Australia is now the newest country to enter the ETF crypto-related space. Debuting last week, the Cosmos Global Digital Miners Access ETF tracks cryptocurrency miners and infrastructure providers and is listed on the Chi-X Australia exchange. Link


And according to some reports, this Thursday (to be confirmed), the BetaShares Crypto Innovators ETF (CRYP) will launch on the ASX. CRYP will track the Bitwise Crypto Industry Innovators Index and provides investors with exposure to global companies at the forefront of the crypto economy. Link


Flows


There was no shortage of smart beta articles last week with pros, cons and everything in between including flows. And not surprisingly one of the big three is leading the smart beta inflow race this year – Vanguard. iShares smart beta ETFs remain the market leaders in terms of AUM posting assets of $491bn as of September 30 — the highest among US fund providers.

However, iShares’ flows in the first nine months of 2021 were less than half the level that Vanguard’s smart beta funds garnered over the same period. Vanguard’s $315bn smart beta line-up — the second largest among ETF providers — raked in $31bn over the nine months to September 30. iShares funds, meanwhile, drew in $11.7bn.


Invesco’s $106.9bn smart beta ETF line-up, which is the third largest in the sector, brought in $11.4bn during the first nine months of 2021, according to Morningstar. Charles Schwab’s $80bn smart beta ETFs drew a combined $12.8bn over the same period, and the group is the fourth-largest provider of such funds.


First Trust is the fifth largest smart beta ETF provider with $60bn in assets as of September 30, according to Morningstar. Its line-up brought in $8.2bn in the first nine months of 2021. Link

Noteworthy


FTSE Russell has made inroads into the cryptocurrency industry with the launch of its new bitcoin, ethereum and cardano benchmarks. Launched in partnership with Digital Asset Research, the FTSE Digital Assets index series is comprised of the FTSE Bitcoin index, FTSE Ethereum index and FTSE Cardano index. Link


Pensions & Investments has partnered with Trackinsight to launch P&I ETF Exchange, a digital platform, known as the ETF Exchange, aimed at providing asset owners and institutional investors with sophisticated data analysis tools to make investment decisions. Launched yesterday, 1 November, the platform is designed to provide more streamlined ETF analysis to Institutional clients -- pension and retirement funds, endowments and foundations, and sovereign wealth funds. Link


Australia’s corporate regulator, the Australian Securities and Investments Commission (ASIC), provided the green light to a range of cryptocurrency-related ETFs, which could see Bitcoin and Ethereum-backed investment funds trading on the ASX in the coming months. The new guidelines will allow funds to launch ETFs that invest directly in cryptocurrencies or in crypto-adjacent assets, such as crypto miners and coin exchanges. Link


A WisdomTree survey of over 600 European professional investors found that 72% of UK advisors have spoken to their clients about investing in digital assets, with 45% admitting their clients were willing to invest outside their association. And almost half of UK investment advisers have said their clients are willing to sidestep their relationship to allocate to cryptocurrencies. Link

The confusion around Facebook Inc.’s new name has been good news for one product with a fortunate ticker. The Roundhill Ball Metaverse ETF, which trades under the ticker META, saw an inflow of about $14 million. It was the biggest influx for the fund since the start of September and trading volume in the ETF’s shares surged to a record high after the announcement. Clearly a case of mistaken identity and trading the wrong symbol.

For reference, 1st November the Facebook ticker closed around $329.98 and the META ETF around $15.50. That is quite a “discount” (FB never reached that low even in 2012) and sadly, a case of retail not doing their homework before pulling the trigger. Link


Additional interesting reads:

Bloomberg and Goldman Sachs AM partner on new clean energy index. Link

What are the drawbacks to investors of holding a bitcoin futures ETF?. Link

BlackRock slashes fees on 8 ETFs. Link

Traders bet ethereum will benefit from ETF boost in 2022. Link

Smart beta: sometimes smart, sometimes not. Link



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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