Best month ever for Europe’s equity ETFs
Fund Launches and Updates
Fidelity has completed its sustainable research enhanced ETF range with the launch of a Japan and Pacific ex-Japan strategies.
The Fidelity Sustainable Research Enhanced Japan UCITS ETF (FJPR) and the Fidelity Sustainable Research Enhanced Pacific ex Japan UCITS ETF (FPXR) are listed on the London Stock exchange with ongoing charges of 0.30%. Link
Legal & General Investment Management (LGIM) has launched a five-strong core fixed income ETF range that incorporates ESG metrics.
Tracking JP Morgan indices, the five ETFs offer exposure to gilts, sterling corporate bonds, 0-5 year sterling corporate bonds, emerging market government bonds and China bonds. Total expense ratio for the five range from 0.06% through 0.30%. Link
ETFs attracted record inflows of $121bn in November, a jump of 14.5 per cent on the previous best month for new business. The huge monthly haul brings net global inflows in the first 11 months of this year to $659.3bn, 15.4 per cent more than the $571.1bn gathered over the same period in 2019, according to ETFGI, a London-based consultancy.
“The ETF industry is on course for a record year. Investor inflows globally into ETFs have already surpassed the previous full-year record of $654bn registered in 2017,” said the founder of ETFGI. Link
Index-tracking funds now account for a fifth of the European investment market for the first time.
But some fear the continued existence of “kickback” payments, which reward distributors for selling more expensive actively managed funds, will prevent Europe from following the trajectory of the US, where 40 per cent of money is passive.
“In Germany and France you still have the big kickback model in place [and] the situation is worse in Italy, it’s outrageous, so this is going to hamper the growth of index funds,” said Ali Masarwah, a member of the European research team at Morningstar. Link
S&P Dow Jones Indices has partnered with crypto software and data company Lukka for the launch of a global cryptocurrency asset index capabilities.
The benchmarking solutions will be a combination of SPDJI customised index offering supported by Lukka’s crypto asset pricing data. The partnership is a result of the growing interest in cryptocurrencies in tandem with the growing usage of blockchain technology. Link
BBH published its C-Suite asset manager survey last week which gathered information from 50+ senior executives and spanned a wide spectrum of global asset managers including large, multinational asset allocators and smaller, boutique firms.
Among a number of interesting findings specific to ETFs, it was found that ETFs remain a core component of their product suite — 63% of respondents either have ETFs or are looking to enter the market. Link
Fund in Focus
Cathie Wood’s once-niche upstart just beat out JPMorgan for the largest actively managed exchange-traded fund in the U.S.
A record $275 million inflow on Thursday boosted the Ark Innovation ETF (ARKK) to just under $16 billion in total assets, according to data compiled by Bloomberg. That pushed the tech-heavy ARKK past the $15.2 billion JPMorgan Ultra-Short Income ETF (JPST). Link
This brings us to this week’s fund in focus which is also actively managed, JPMorgan ETFs (Ireland) ICAV – Global Emerging Markets Research Enhanced Index Equity (ESG) UCITS ETF.
The Sub-Fund aims to achieve a long-term return in excess of MSCI Emerging Market Index by actively investing primarily in a portfolio of emerging market companies.
The fund has $518m in assets under management and YTD has retuned +11.52%. Launched in 2018, the fund has a TER of 0.30%.