Direct indexing is a new trend in the investment industry that is looking to give investors more flexibility in their investments at a lower cost.

This week we launch a new report where we investigate what direct indexing really is, and what it is not. We assess the potential for disruption on the asset management industry in the US and in Europe and look at whether direct indexing is worth the hype for different investors’ profiles.

Fund Launches and Updates

 

EMEA

 

DWS expands Paris-Aligned climate range with emerging market ETF. The Xtrackers Emerging Market Net Zero Pathway Paris Aligned UCITS ETF (XEMN) is listed on the Deutsche Boerse and the London Stock Exchange with a total expense ratio (TER) of 0.20%. etfstream

 

iShares launches Metaverse ETF. The iShares Metaverse UCITS ETF (MTAV) is listed on Euronext with a total expense ratio (TER) of 0.50%. That would make 6 Metaverse ETFs now available in Europe. fintech magazine

 

DWS is to terminate its Russia ETF after MSCI decided to suspect the underlying index. The Xtrackers MSCI Russia Capped Swap UCITS ETF (XMRD) will end life on 19 December. etfstream

 

HANetf has decided to terminate the iClima smart energy ETF having only raised $4m in AUM, It will close on 16 January 2023. etfstream

 

Eqonex is to shut its bitcoin ETN after failing to replace its now closed in-house custodian. etfstream

 

CoinShares and 21Shares close FTX ETPs. No guesses for the underlying reason behind that choice. etfstream

 

VanEck is listing the VanEck Bionic Engineering UCITS ETF on both the London Stock Exchange and the German stock exchange Xetra. The new ETF allows investors to invest in companies from the bionics sector and comes with a TER of 0.55%. etfexpress

SocGen launches six ETCs on Deutsche Boerse following Commerzbank acquisition. etfstream

Franklin Templeton is renaming its European ETF platform and removing the LibertyShares, Liberty and LibertyQ naming conventions from 10 ETFs. Good call if you ask me. etfexpress

 

AMERICAS

 

Tidal Launches its First Actively Managed Credit ETF. The Senior Secured Credit Opportunities ETF (SECD), lists on the NYSE Arca and comes with a TER of 0.95%. etf.com

 

Dimensional launched the U.S. Large-Cap Value and Global Real Estate ETFs. The Dimensional US Large Cap Value ETF (DFLV) and the Dimensional Global Real Estate ETF (DFGR) are listed on the NYSE Arca and comes with a TER of 0.22% and 0.24% respectively etftrends

JPMorgan is switching 3 Active ETFs to Passive. The JPMorgan U.S. Aggregate Bond ETF (JAGG) will change its name to the JPMorgan BetaBuilders U.S. Aggregate Bond ETF. The JPMorgan Corporate Bond Research Enhanced ETF (JIGB) will change its name to the JPMorgan BetaBuilders USD Investment Grade Corporate Bond ETF and the JPMorgan High Yield Research Enhanced ETF (JPHY) will change its name to the JPMorgan BetaBuilders USD High Yield Corporate Bond ETF.

We guess they were not that “active” after all. etf.com

Wall Street’s Booming ETF Market Is on the brink of record launches in 2022. 422 new launches this year, breaking last year’s record. I’m betting next year will be even more. FA

 

Full list of U.S. launches:

 

ASIA-PACIFIC

Australia’s ETF market is becoming more diversified as reported by Cerulli. Not really sure how they interpret diversification when Vanguard, BetaShares, and iShares received 75% of the industry’s flows between them. etfexpress

 

 

 

Flows

 

‘Remarkable’ resurgence in flows to bond ETFs, reports BlackRock. According to BlackRock investors are pouring into Bonds at the expense of Equities. citywire

The worldwide crypto based ETPs AUM dropped 17% in November, dropping from $25.3 billion to $21 billion, according to crypto firm Fineqia International. Yahoo

Investors have completely unwound last year’s purchases of European equity exchange traded funds, according to the Financial Times. This year’s selling has taken net outflows of $27bn, reversing inflows of $27.2bn witnessed during 2021. FT

 

Noteworthy

 

We have launched a new report on the topic of Direct Indexing.

It’s an issue which has received a lot of attention this year so our aim was to understand better what it is, what impact it was have on the industry and what clients is it most suited to. A copy of the report can be found on our website. Blackwatersearch.com

The beginning of the big mutual fund-to-ETF conversion wave?  A very bullish piece from the FT on the future for ETFs. FT

China focused funds back in vogue. 54% returns in a 30 day period, not a bad months work. Etf.com

VanEck bullish on crypto for 2023. etf.com

 

Additional reads

 

Direct Indexing poised for ‘tremendously strong’ inflows according to Cerulli. etf.com

DWS lays out new strategy to reclaim number two spot in European ETF space Ignites

Is crypto uninvestible? Institutional Investor

2022 – A milestone year for ETFs. FA

$1.3T Asset Manager exploring use cases for NFTs. blockworks

 

From Behind the Desk

 

This is our last newsletter of the year so it’s time to put down the pen and put our feet up for a few weeks.

We wish all of our readers a wonderful festive season and hope Father Christmas comes to you all.

Thank you everyone for your continued support.