The boom of thematic funds is not just a Taiwanese phenomenon, but has become a global trend
The rise of Thematic ETFs continues
Rize ETFs launched a new ESG ETF and also announced their new stakeholder, AssetCo. In the U.S., another entrant to the crypto ETP SEC filings with Global X entering the ring and in Asia, gold ETFs are gathering significant assets.
Fund Launches and Updates
BlackRock has cross-listed its $13.5 billion iShares Physical Gold ETC into the German market and has been listed on Xetra in euros. Prior to the listing, the ETC had only been available in Europe on London Stock Exchange. Link
Rize ETF has expanded its Ucits-compliant range with a fund focused on environmental impact investing. The Rize Environmental Impact 100 Ucits ETF, which has the ticker LIFE, is believed to be the first of its kind in Europe, as it will focus on the top 100 global companies for environmental impact. Link
SEBA Bank has joined 21Shares and Valour in launching a polkadot exchange-traded product (ETP).The SA1 Polkadot ETP (SDOT) is listed on the SIX Swiss Exchange with a total expense ratio (TER) of 1.25%. Link
Insurance group Zurich UK has switched almost $1bn assets to a new ESG index created in partnership with DWS and MSCI. Link
Global X ETFs has filed for a Bitcoin ETF. The global provider of ETFs filed with the U.S. SEC on 21 July and suggested that if approved, it would be available under the name of Global X Bitcoin Trust and will be traded on the CBOE BZX exchange.
Bank of New York Mellon will serve as the Trust’s administrator. Link
Mirae Asset Investment Managers (India) has announced the launch of an ETF tracking Nifty Financial Services Index – the ‘Mirae Asset Nifty Financial Services ETF’. The ETF will have a total expense ratio of 13 bps and will be listed on both National Stock Exchange and Bombay Stock Exchange. Link
In Canada, ETF net sales declined in June, slipping from $7.6 billion in May to just over $5 billion in June.
Despite the softer ETF sales in June, net sales for the first half of this year were well ahead of last year’s total. Through the first six months of the year, ETF net sales totaled $32.7 billion, up from $22.6 billion for the same period a year ago.
ETF assets rose by $9.4 billion in June to finish the month at $306.8 billion. Link
Gold ETFs have continued to attract strong inflows in Asia this year. As of end-June, Asia-domiciled gold ETFs had posted net inflows of $1.6bn, making it the only region to register net inflows.
China, India and Hong Kong-domiciled gold ETFs have been the main driver of the inflows. In contrast, there were significant outflows from the funds in the US and in Europe, with total net outflows reaching $8.5bn and $3.6bn respectively over the same period, according to Morningstar data. Link
Martin Gilbert’s AssetCo has entered the world of ETFs with the acquisition of a majority stake in Rize ETF.
AssetCo is planning to pay £16.5m for a 63% stake in the thematic ETF specialist. Rize ETF was founded by four former Legal & General Investment Management and ETF Securities employees – Rahul Bhushan, Stuart Forbes, Anthony Martin and Jason Kennard – in late 2019. Link
A new Nickel Digital Asset Management survey of institutional investors and wealth managers from the US, UK, France, Germany, and the UAE who collectively have $275 billion in assets under management, reveals that 76% describe the concerns about security of digital assets and custodial services as a ‘significant’ hurdle preventing many from investing in cryptoassets for the first time.
The same percentage said this about the size of the market and liquidity, followed by 71 per cent who see the regulatory environment for the crypto market as a major issue. Link
Crypto ETP issuer 21Shares has hired Euronext’s Isabell Moessler as head of distribution for EMEA along with four executives as the firm increases its headcount by 50% in a year. Link
UBS Financial Services will pay $8.1m to settle allegations that it had faulty policies and procedures that led to clients holding a short-term, volatility-linked ETP for longer than they should have, the SEC announced earlier this week.
Between at least January 2016 and January 2018, financial advisers in UBS’s discretionary Portfolio Management Program purchased and held the iPath S&P 500 VIX Short-Term Futures ETN for clients for a longer period of time than it was intended to be held.
The ETN is designed to be held for a few days, but hundreds of accounts held the product for more than a year. Link
Two of the world’s largest custody banks have publicly backed cryptocurrency trading platform Pure Digital, in a move that points to growing demand from traditional asset managers for bitcoin and other digital tokens.
Bank of New York Mellon has joined the consortium of six banks behind the launch of London-based Pure Digital, three months after State Street became the first to announce its support for the planned exchange.
The step suggested that normally staid and conservative custodians, which safeguard assets for some of the world’s largest asset managers, are fielding increasing interest from clients about trading digital currencies.
BNY Mellon set up a digital unit in February, while State Street followed with a similar announcement in June. Both banks are now looking to expand their capabilities beyond custody and into trading. Link
The number of new thematic ETFs in Taiwan has jumped this year, and the market has more than doubled in size to $5.1bn in the year ended first quarter of 2021.
In 2020, only four thematic ETFs were launched in total, with three of them targeting the 5G theme and one focusing on cyber security.
Cathay Securities Investment Trust’s Global Autonomous and Electric Vehicles ETF, which was only listed on July 1, has already become the largest foreign equities ETF in Taiwan, with $483m in AUM, according to data from Keystone Intelligence.
The boom of thematic funds is not just a Taiwanese phenomenon, but has become a global trend since the start of the coronavirus pandemic. Over the past three years to the end of March, global thematic funds’ assets under management more than tripled to $595bn, according to a Morningstar report published in May. Link
The FCA has increased their scrutiny of new ESG products and has warned the asset management industry it must improve on the “poor quality” of many ESG fund launch applications it has seen. Link
NSCC introduces automated process for ETF collateral management. now processes an average of 260,000 ETF create/redeem transactions every day. Link
Five reasons customized baskets matter when it comes to active ETFs. Link
Yves Perrier comments on gobbling up other firms is not the only way for asset managers to survive. And why Amundi has avoided expansion into the U.S., but instead is focusing on China. Link
In a recent blog post, Alan Miller, chief investment officer of SCM Direct, has accused LGIM of indulging in “Extra Strong Greenwashing” by claiming that their £444m LSEG ESG China CNY Bond Ucits ETF is ESG compliant. Link