Why build an ETF business when you can simply buy one?
Michael O’Riordan, founding partner of Blackwater wrote a post about this on LinkedIn last week and based on the responses he received, it seems like the answer buying is a lot more appealing than building.
From what we can see, the number one reason by a long shot is in order to limit the execution risk. Firms are simply apprehensive in building it themselves and screwing it up and so are content to pay more to ensure this scenario does not materialise.
We can understand that, but ignorance is bliss. Building it yourself is cheaper long term and you create more value, 100%. Plus building it is not rocket science, let’s be honest. It’s been done many times and the path is clear.
But still, fear does strange things to people and ultimately we are all lead by emotion.
Fund Launches and Updates
BNP Paribas Asset Management is set to launch Irish domiciled iterations of its world ESG filtered and ESG infrastructure ETFs, ETF Stream reveals.
The BNP Paribas Easy MSCI World ESG Filtered Min TE UCITS ETF and the BNP Paribas Easy ECPI Global ESG Infrastructure UCITS ETF both registered with the Central Bank of Ireland (CBI) on 27 March. etfstream
Axa Investment Managers has launched an actively-managed euro corporate bond ETF linked to a Paris-aligned benchmark index.
The Axa IM Euro Credit PAB Ucits ETF, which is classed as Article 8 under the Sustainable Finance Disclosure Regulation, is the first fixed income product in the firm’s ETF suite.
It will focus on euro-denominated, invest ent-grade credit and is actively managed against the ICE BofA Euro Corporate Paris Aligned (Absolute Emissions) index. citywire
Valour Inc. has entered into a collaboration with Bitcoin Suisse AG, the Swiss crypto-finance and technology pioneer.
The product partnership aims to issue Exchange Traded Products (ETPs) backed 1:1 by digital assets, leveraging both Valour Inc.’s and Bitcoin Suisse AG’s unique capabilities and long standing expertise in the digital asset market.
The primary focus of this joint initiative is to launch, list, operate, and distribute ETPs in the international and Swiss market where Bitcoin Suisse has already established a market-wide brand recognition in the crypto assets sector. yahoo
DWS has launched an ESG version of its four-strong global equity factor ESG range.
The ETFs which cover minimum volatility, momentum, quality and value are listed on the Deutsche Boerse and the London Stock Exchange with total expense ratios (TER) of 0.25%.
Tracking MSCI indices, the ETFs will use low carbon metrics with a socially responsible investing tilt to capture large and mid-cap companies from industrialised countries. etfstream
Innovator Capital Management has unveiled the Innovator Equity Defined Protection ETF (TJUL US).
This is a new type of defined outcome strategy that seeks to fully buffer against any losses in the S&P 500 over the fund’s outcome period. TJUL is the first ETF that seeks to offer 100% protection against declines in the S&P 500 over its outcome period, which is two years. etfstrategy
Matthews Asia, a specialist in emerging markets investing, has launched a new ETF providing actively managed exposure to Korean equities. The Matthews Korea Active ETF (MKOR US) has been listed on NYSE Arca with an expense ratio of 0.79%. etfstrategy
Avantis Investors has launched a small cap international stock ETF, hoping to capitalize on the increasing valuation spread between U.S. and international stocks.
The Avantis International Small Cap Equity ETF (AVDS) is an actively managed exchange-traded fund that invests in small cap companies outside the U.S. It comes with an expense ratio of 0.30%. etf.com
Global X has filed to launch a bitcoin futures fund as soaring expectations for a spot bitcoin fund pushes investor demand for crypto products. The firm will issue the fund in partnership CoinDesk Indices, a subsidiary of the popular crypto news site, according to its July 20 filing with the SEC.
The fund would track the CoinDesk Bitcoin Trend Indicator Index—an index CoinDesk Indices has developed based on its quantitative pricing predictor. etf.com
Australia’s Monochrome Asset Management has filed an updated application with the Australian Securities Exchange to list its first bitcoin exchange-traded fund on the local bourse.
The ETF launch will be supported by “leading service providers” such as State Street Australia, Ernst & Young, Automic, CF Benchmarks and Gemini Trust Company. ignitesasia
The global fixed income ETF market has just reached a significant milestone with assets under management (AUM) now above US$2 trillion.
What makes that achievement more remarkable is the exponential growth seen in the last four years, doubling the $1 trillion AUM which took 17 years to achieve following the world’s first fund of its kind in 2002. wealthprofessional
Crypto investors have poured money into bitcoin exchange-traded products at a record pace ever since BlackRock filed for a spot-based ETF on June 15.
New data from K33 Research shows the BTC-equivalent exposure of ETPs listed worldwide increased by 25,202 BTC ($757 million) to 196,824 BTC in the four weeks to July 16.
That’s the second-highest monthly net inflow, surpassed only by inflows seen following the launch of ProShares’ futures-based ETF and other futures-based ETFs in October 2021. coindesk
Thematic ETFs listed globally gathered net inflows of $6.62 billion during June, reported ETFGI.
According to its ‘June 2023 ETF and ETP Thematic industry landscape insights’ report, this brought year-to-date (YTD) net inflows to $19.11 billion – the fourth highest recorded since 2020.
Total assets invested in thematic ETFs globally increased by 18.3% year-to-date, growing from $221 billion at the end of 2022 to $261 billion at the end of June 2023. funds-europe
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Retail investors aged 18-34 are more than twice as likely to invest in ETFs than those aged over 55, according to new research by Invesco.
The vast majority (92 per cent) of investors aged 18-34 have an allocation to ETFs in their portfolios, versus less than half (43 per cent) of over-55s. etfexpress
Will Artificial Intelligence eat ETFs for lunch?
Recent innovations in artificial intelligence might allow customers, in search of a perfect expression of their investment preferences, to bypass ETFs entirely.
By combining generative AI with fractional share trading, investors could potentially bypass ETFs and instantly create a custom basket of securities that meet their hyper specific investment needs.
Has the combination of generative AI and fractional share trading the potential to completely upend the ETF industry? etf.com
Movers and Shakers
Demis Todeschini has joined Axa Investment Manager as head of Italy.
From behind the Desk
Lots of people are sitting on the beach right now relaxing and enjoying themselves and thinking, wouldn’t it be great if I could do this all the time.
Then their minds drift to the plans they have for when they retire “I’m going to do this and I’m going to do that and life will be awesome”.
Sounds cool, but why do so many people put off the plans they have for when they retire? Why not do it now?
Let’s face it when you retire you are (probably) going to be old and less active.
So screw waiting, do it now.