The death of ETFs may be somewhat premature
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Interesting thoughts from the CEO of Schroder’s this week, who predicted that the introduction of digital wallets will see the end of the fund structure, which would include ETFs. Whilst this might seem radical, we think it’s something which has merit.
The Asset Management industry is no different than any other industry in that technology forces change. Now, whilst many in the industry might resist that change kicking and screaming (our mutual fund friends, for example) it would be naïve to believe everything will stay the same forever, right?
Fund Launches and Updates
EUROPE
Invesco has launched a global corporate bond ETF incorporating ESG screening criteria. The Invesco Global Corporate Bond ESG UCITS ETF (GCBE) is listed on the London Stock Exchange with a TER of 0.15%.
First Trust Global Portfolios has expanded its range with the launch of a dividend achievers ETF. The First Trust SMD Rising Dividend Achievers UCITS ETF (SDVY) is listed on the London Stock Exchange with a total expense ratio of 0.60%.
Ark Invest has finalised its takeover of RIZEetf with the rebranding of the business to ARK Invest Europe.
WisdomTree has launched the WidsomTree Energy Transition Metals and Rare Earths Miners Ucits ETF (RARE).
The firm partnered with Wood Mackenzie, an energy transition research and consulting firm, to create the bespoke index for the ETF, which will have a total expense ratio of 0.50%, The ETF is listed on Xetra, Borsa Italiana and London Stock Exchange.
HSBC Asset Management will close four emerging market ETFs due to low assets under management (AUM).
In a shareholder notice, the UK giant said the HSBC MSCI EM Latin America UCITS ETF (HMLA), the HSBC MSCI Brazil UCITS ETF (HBRL), the HSBC MSCI Mexico Capped UCITS ETF (HMED) and HSBC MSCI Turkey UCITS ETF (HTRD) will close on 10 May.
AMERICAS
Fidelity has three actively managed ETFs that rely on options for their execution. The new products include the Fidelity Yield Enhanced Equity ETF (FYEE), the Fidelity Hedged Equity ETF (FHEQ), and the Fidelity Dynamic Buffered Equity ETF (FBUF).
Although FYEE charges a net expense ratio of 0.28%, FHEQ and FBUF both have expense ratios of 0.48%. All three list on the Cboe BZX Exchange.
PT Asset Management rolled out an actively managed short-term bond ETF that it manages using its in-house investment methodology, Shape Management.
The Performance Trust Short Term Bond ETF (STBF) looks to maintain an average duration for its portfolio that tops out at four years. The fund lists on the Cboe BZX Exchange and has an expense ratio of 0.66%.
Westwood Holdings launched its first ETF. The Westwood Salient Enhanced Midstream Income ETF (NYSE: MDST). MDST uses a fundamental approach to target the “midstream” portion of the energy sector and adopts a high conviction investment approach. The new ETF has an expense ratio of 0.80%.
Obra Capital, another new entrant to the market had two launches on NYSE this week. The Obra Opportunistic Structured Products ETF (OOSP) and the Obra High Grade Structured Products ETF (OGSP) are actively managed and have a net expense ratio of 0.90%.
Both products provide investors with investment options with access to a wide variety of securitized products.
Strive Asset Management has launched the Strive Mid-Cap ETF (NYSE Arca: STXM).The fund aims to track the performance and returns of the Bloomberg US 400 Index and has a TER OF 0.18%.
ASIA
Global X ETFs has launched the Global X Artificial Intelligence ETF (ASX: GXAI) on the ASX, offering Australians targeted exposure to innovation and growth in artificial intelligence (AI) related companies.
Hang Seng Investment Management has launched the Hang Seng S&P 500 Index ETF. The new ETF will be listed on the Hong Kong Stock Exchange on 23 April.
OCBC Securities and Lion Global Investors will list the Lion-OCBC Securities APAC Financials Dividend Plus ETF on the Singapore Exchange S68 -0.66% (SGX) on May 13.
This will be Oversea-Chinese Banking Corporation’s (OCBC) fourth ETF in less than four years after the Lion-OCBC Securities Hang Seng TECH ETF, Lion-OCBC Securities China Leaders ETF and Lion-OCBC Securities Singapore Low Carbon ETF.
A podcast series focused on exploring the career journey of industry leaders within the ETF and Digital Assets space.
This week’s guest is Olga de Tapia, Global Head of ETF & Indexing Sales at HSBC Global Asset Management.
Get to hear her personal story and be inspired clicking HERE.
Flows
Assets invested in the global ETFs industry reached a record $12.71 Tn at the end of Q1 beating the previous record of $12.25 Tn at the end of February 2024, according to ETFGI.
- Assets have increased 9.2% YTD, going from $11.63 Tn at end of 2023 to $12.71 Tn.
- Net inflows of $144.94 Bn during Q1.
- YTD net inflows of $397.61 Bn are the highest on record, the second highest YTD net inflows were $360.72 Bn in 2021 and the third highest YTD net inflows of 305.82 Bn in 2022.
- 58th month of consecutive net inflows
Continuing with Flows, Morningstar report that US ETFs hauled in more than $195 billion in the first quarter of 2024, including $103 billion in March alone.
- Stock ETFs collected $76 billion, led by broad index trackers in the US large-blend Morningstar Category.
- Bond ETFs cracked $50 billion of inflows for the second quarter in a row.
- Active ETFs remained in high demand, collecting one third of first quarter ETF flows despite representing less than 10% of the market.
- The “new nine” spot bitcoin ETFs closed the first quarter with nearly $27 billion of inflows.
- Vanguard dominated the ETF provider flows race with a $66 billion first quarter haul.
Noteworthy
The CEO of Schroders has claimed in an interview with Finanz und Wirtschaft that we won’t be using funds and ETFs in future, and that it’s unlikely that ETFs will flourish’ once digital wallets are established.
Peter Harrison believes that funds were “outdated” and that the industry was a sector that had “not yet been shaken up by disruptive forces”, adding that it had to prepare for transformative changes.
Hong Kong regulators will likely approve a spot bitcoin ETF very soon, which in turn could open the floodgates for Chinese investors looking for a new haven next to gold and overseas real estate and stocks in which to store their wealth.
An ETF approval could raise the probability of a Chinese retail buying frenzy similar to the 2013 bull market.
Here are some mind-blowing numbers. iShares pulled in $67.2 billion in assets globally during the first quarter of this year.
Inflows and market gains brought global ETF assets to $3.75 trillion, according to the company’s earnings report. That’s a 22% gain from last year’s first quarter, when the company reported $3.07 trillion in ETF assets. Year-over-year, BlackRock has pulled in $231.5 billion in new assets. Not bad.
Movers and Shakers
Vanguard has appointed Jon Clerborne to lead its business in Europe, replacing Sean Hagerty who relocates back to the US.
Joseph Donghan Han has left Global X to join Amplify ETFs as Head of Asia Business Development.
Matt Maillet has joined Capital Group as ETF Capital Markets.
Audrey Belloff has joined 21.co as Head of Communications.
Roundhill Investments has promoted Dave Mazza to Chief Executive Officer.
The Investment Association (IA) has appointed Tom Stephens, global co-head of ETF capital markets at JP Morgan Asset Management (JPMAM), as chair of the ETF committee. Rajat Tiwari, iShares EMEA global markets at BlackRock, will take on Stephens’ previous role as deputy chair of the ETF committee.
From behind the Desk
Do you have the best job in the world? Most people will probably answer no to that question, but if that includes you then, why?
Think how much time of your life is spend working. Wouldn’t it be sensible to be spending that time doing something you actually love rather than something you just tolerate or put up with.
Everyone we are sure believes their lives are worth more than just being tolerated, so do yourself a favour and find something you love doing.
About us
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