Purpose Investments to expand Down Under
Canadian Purpose Investments has plans to replicate the success of their $1.7bn bitcoin ETF in Australia.
Fidelity International joins the crypto space in Europe and new FCA ESG rulings may finally drive larger inflows to UK listed ETFs.
Fund Launches and Updates
21Shares has launched the 21Shares Cosmos ETP (ATOM) on the SIX Swiss Exchange with CHF, EUR, and USD share classes. The ETP comes with an expense ratio of 2.50%. Link
Fidelity International has entered the cryptocurrency space with the launch of the Fidelity Physical Bitcoin ETP (FBTC). Listed on the Deutsche Boerse and Frankfurt Stock Exchange, FBTC has a total expense ratio of 0.75%. The ETF is set to list on the SIX Swiss Exchange in coming weeks. Link
Global X has launched the Global X Solar and Global X AgTech & Food Innovation Ucits ETFs, both with a TER of 0.50%. They also launched the Global X SuperDividend Ucits ETF with a management fee of 0.45%. All three launched on the LSE and the Deutsche Börse Xetra and are domiciled in Ireland. Link
JP Morgan Asset Management will include an ESG filter to the following three ETFs: JPMorgan EUR Corporate Bond Research Enhanced Index UCITS ETF (JREB), the JPMorgan EUR Corporate Bond 1-5 yr Research Enhanced Index UCITS ETF (JR15) and the JPMorgan USD Corporate Research Enhanced Index UCITS ETF (JRUB). Link
JP Morgan Asset Management has launched two actively-managed ETFs — the JPM China A Research Enhanced Index Equity ESG UCITS ETF (JREC) and the JPM AC Asia Pacific ex-Japan Research Enhanced Index equity ESG UCITS ETF (JREA). Both products are listed on the LSE, Deutsche Boerse and SIX with total expense ratios of 0.40% and 0.30%, respectively. Link
Valour has launched the Valour Terra (LUNA) ETP and the Valour Avalanche (AVAX) ETP which are listed on the Nordic Growth Market. Link
VanEck is planning to add ESG screens to the $VanEck Vectors Semiconductor UCITS ETF (SMGB) and the VanEck Vectors Hydrogen Economy UCITS ETF (HDRO). Link
Hong Kong fund manager CSOP will list the first ETF in Hong Kong that invests in US stocks linked to the metaverse. The CSOP Asset Management’s Metaverse Concept ETF began trading in the Hong Kong stock market last week. Link
Resolution Capital Global Property Securities Fund active-ETF launched on the ASX and provides investors access to a portfolio of Global Listed Property Securities (GREITs). Link
Flows and Trading Volume
Keeping this short as we have already reported on ETF flows for January. Refinitiv Lipper’s Detlef Glow pointed out an interesting observation — last month, even with intense volatility and risk-off activity, money market products saw outflows of -€56.3 bn.
Mutual funds (-€38.0 bn) faced outflows, while ETFs (+€25.6 bn) enjoyed inflows for the month. Link
In a trend that appears to be gathering steam, Toronto based Purpose Investments is looking to bring their success not south of the border but around the globe to Australia.
One year post launch of the $1.7bn Purpose Bitcoin ETF, Purpose Investments Inc. is joining the race to launch the first Bitcoin ETF which is already afoot with 21Shares/ETF Securities, VanEck, BetaShares and Monochrome Asset Management.
Long-term, Purpose has global expansion plans for Europe, the United Kingdom, Asia, the Pacific, Middle East, and South America. Link
A lesson in how expensive an ETF is to run prior to hitting that all important break-even level.
The MSCI Global Climate Select ETF (NTZO) was launched in November of last year and has only gathered $2mn so far. It is certainly not the only new fund having a hard go at gathering assets.
However, according to the fund manager, Impact Shares, they are spending around $25k a month to keep the fund afloat and will likely wind it down at the end of March without further investment.
The other frustrating aspect of this story is that they had large institutional backing – both Bank of America and Citigroup pledged up to $50mn and $12.5mn for the ETF but with the clause that their investments could not account for more than 25% of the fund.
Because of the ETF’s small size, the banks could not provide their maximum dollar commitments without exceeding the pledged percentages. Link
The elimination of commission payments to financial advisers via RDR ten years ago was supposed to create a positive windfall for ETF issuers.
However, the adoption of ETFs by IFAs and wealth managers is still lagging behind. As we shared in our report, the Transatlantic Divide, the resistance to ETFs is partly due to culture and not wanting to disrupt how things have always been done. Resistance to change essentially.
However, according to a recent Wealth Adviser article, new FCA rules around ESG products may finally bring that long awaited influx of flows into ESG ETF products. Link
According to SEC filings, Direxion and AXS Investments are in a race to deliver the first U.S. ETFs that would allow investors to make leveraged bets on single stocks.
Similar funds already exist here in Europe via GraniteShares and Leverage Shares ETPs. Direxion has filed for 24 new funds that would offer the inverse, double the inverse or double the gain on single companies including Tesla Inc. and Meta Platforms Inc.
This follows on the heels of AXS Investments which filed for 18 new funds that would also offer double the inverse or gain on single companies. Link
More retail investor education is needed especially when it comes to fees. Link
Catchy ticker and fund names are not everything – SEC Charges Head Of Defunct Whiskey ETF With Fraud. Link
ESG funds are rising in popularity, but research has found the sector is rife with greenwashing. Lawyers warn a reckoning is coming. Link
AssetCo profits quadruple in 2021 as it seeks further acquisitions. Link
Flow Traders dismisses Meyers following BlackRock complaint. Link
Experts see the direct indexing market as the next battleground for the great wealth transfer. Link