This week WisdomTree expanded its crypto range to include a new ethereum ETP, ESG flows in Q1 outpace all of the rest, and a Blackwater survey finds that 82% of European mutual fund managers have no plans to launch ETF products and do not see them as a threat.

Fund Launches and Updates

Amundi has further expanded its climate-linked ETF range with the launch of a new strategy in the investment grade and euro corporate credit sector. The fund, known as Amundi iCPR Euro Corp Climate Paris Aligned PAB – Ucits ETF DR, will have an ongoing charge of 0.16%. Link

BlackRock has launched the iShares S&P 500 Paris Aligned UCITS ETF and the iShares MSCI World Paris Aligned UCITS ETF which are designed to mitigate exposure to transition and physical climate risks. Link

WisdomTree has expanded its cryptocurrency exchange-traded product range with the launch of an ethereum strategy. The WisdomTree Ethereum ETP (ETHW) is listed on Deutsche Boerse and SIX Swiss Exchange with a total expense ratio of 0.95%. Link

Flows

Inflows into sustainable exchange traded funds overtook those into all other ETFs for the first time in Europe in the first quarter of the year.

The finding caps an extraordinary rise for ETFs that claim to invest according to ESG principles, which recorded exponential growth globally in 2020 with assets jumping three-fold from $59bn to $174bn, according to data from TrackInsight.

Flows accelerated still further in the first three months of this year, with the record $25.8bn taken in by ESG ETFs in Europe exceeding the $22.3bn collected by non-ESG ETFs for the first time.

As a result of the surging inflows, the assets of ESG ETFs have now risen above 10 per cent of the overall ETF market in Europe for the first time, the Morningstar data show.

The picture looks quite different in the US, where ESG ETFs accounted for just $7.6bn, or 3.1 per cent, of the record $248bn that gushed into all ETFs in the first quarter of the year. Link

In Europe, one ETF stands head and shoulders above the rest and is another sign of the growing shift towards ESG investing in fixed income.

The SPDR Bloomberg SASB U.S. Corporate ESG UCITS ETF (USCR) has seen a monstrous $5.5bn inflows so far this year, the most across all European-listed ETFs by some distance, as at 25 April, according to data from ETFLogic.

In less than four months, investors have already poured more cash into ETFs tracking U.S. stocks than they did in all of 2020.

The inflows of $246 billion this year eclipse last year’s total of $231 billion, according to data compiled by Bloomberg. Equity exchange-traded funds have added more than $26 billion so far in April, after taking in over $80 billion in both February and March.

The ETF industry overall lured a record $251 billion in the first quarter, with $210 billion going into equities.

Passively managed mutual funds tracking equities have lost $46.5 billion this year and their actively managed peers have faced about $11 billion in outflows, the latest data from Bloomberg Intelligence shows. Link

Wall Street seems to have gone cold on gold exchange-traded funds. ETF investors dumped the most volume of gold since 2013 over the six months through March 31.

The total sold amounted to a whopping 307.8 metric tons worth $17.5 billion at recent prices, according to a recent report from industry group World Gold Council.

The sales coincided with a drop in the net price for the metal and come after nine half-year periods where ETFs added gold to their holdings. Link

Noteworthy

The majority of European mutual fund managers are unconcerned about the exponential growth of ETFs and have no plans to launch an ETF business anytime soon, according to a survey conducted by Blackwater.

The survey, which interviewed over 100 mutual fund asset managers without an ETF offering, found 82% do not see ETFs as a threat to their business despite the rapid increase in demand since the Global Financial Crisis (GFC). Link

The UK financial advisory market continues to elude ETFs, as platforms lack the functionality to cheaply add them to popular model portfolios. While intermediaries have increased their allocations to passive funds, ETFs are struggling to gain traction with financial advisers in the UK.

ETF providers had hoped that regulatory reforms would prompt ETF assets to grow in the UK retail market, but sales of ETFs among UK advisers still lag inflows to index-tracking mutual funds.

ETF net inflows via investment platforms used by financial advisers totalled £615m in 2020, compared with £6.1bn for passive funds overall, according to data from ISS Market Intelligence.

There are several problems, including platforms’ charges, as well as difficulties in buying fractional ETF shares, that are slowing ETF growth in the UK. Link

BlackRock’s decision to slash fees on its flagship China A-share exchange-traded fund in Hong Kong, suggests the market is becoming more competitive and could spark a price war.

BlackRock announced last month that the management fee on its Hong Kong-listed iShares FTSE A50 China ETF would be reduced by more than half to 0.35 per cent from 0.99 per cent per annum, effective on March 22. Launched in 2004, the iShares A50 ETF has long been BlackRock’s largest ETF offering in the territory. Link

Europe’s asset managers are continuing to ramp up their provision of sustainable index and exchange traded funds, launching 33 of these products in the first quarter, compared to 29 in the same period last year.

The frenetic activity at the beginning of this year follows a string of launches in 2020 from Europe’s dominant providers. In 2020, Lyxor launched 18 sustainable ETFs in Europe, more than any other manager. Amundi and iShares, the next most prolific in terms of new sustainable fund provision, launched 16 and 13 new sustainable funds respectively. Link

Crypto advocates will have to wait a while longer for the U.S. regulator’s verdict on Bitcoin exchange-traded fund approval as applications pile up.

The U.S. Securities and Exchange Commission said in a filing Wednesday that the agency is pushing its decision on whether to “approve or disapprove, or institute proceedings to determine whether to disapprove” the structure to June 17.

The delay comes a day before the SEC was due to rule on an application from VanEck Associates Corp., one of at least 11 issuers weighing a Bitcoin ETF, according to Bloomberg Intelligence. Link