Double Travel-themed ETF launches in Europe and U.S.
A number of thematic ETF launches last week including travel related ETFs in both Europe and the U.S. May ETF flows are beginning to trickle in and ETFbook reported net new inflows of $15bn for European based ETFs.
Fund Launches and Updates
Last week 21 Shares listed list three ETPs – bitcoin, ether, and short bitcoin – on Euronext Paris. Per their website, this is a first in France: the listing of liquid, secure, 100% collateralized financial products backed by Bitcoin and Ethereum. Link
HANetf launched Europe’s first airlines, hotels and cruise lines ETF. The Airlines, Hotels and Cruise Lines UCITS ETF (TRYP) will list on the London Stock Exchange and will be passported for sale across Europe, with a total expense ratio of 0.69%. Link
ETC Group is to make its BTCE bitcoin available to trade as of 7 June via the Aquis Exchange MTFs in London and Paris. Link
Valour announced the launch of its Polkadot ETP, the Valour Polkadot SEK ETP, on the Swedish Stock Exchange. Ultimately, with this launch, Polkadot now has two ETP products on the stock market. The first was launched by 21Shares. Link
In Canada, Horizons ETFs launched the Horizons S&P Green Bond Index ETF (HGGB) on the Toronto Stock Exchange. HGGB is Canada’s first ETF focused exclusively on providing exposure to a portfolio of global green bonds. Link
First Trust has expanded its suite of thematic equity ETFs with the launch of an actively managed strategy targeting firms poised to benefit from the application of scientific and technological innovation. The First Trust Innovation Leaders ETF (ILDR US) has listed on NYSE Arca, expense ratio 0.75%. Link
In the U.S., Defiance ETFs launched $CRUZ, the Hotels, Airlines and Cruise ETF – “the travel reopening trade”. Defiance’s CRUZ ETF gives investors access to stocks from the global travel industry in a post-Covid world. Link
KraneShares announced the launch of the KraneShares Bloomberg Barclays China Bond Inclusion ETF (Ticker: KBND). KBND offers investors access to RMB-denominated securities included in the Bloomberg Barclays Global Aggregate Index. Link
Just in time for Pride Month, Wall Street has its first LGBTQ-focused ETF. ProcureAM, in partnership with LGBTQ Loyalty Holdings, launched the new LGBTQ100 ESG ETF. The first-of-its-kind fund uses LGBTQ community data to identify the top 100 companies that most align with the group’s environmental, social, and corporate governance goals. Link
Flows
Data from ETFBook shows that May European ETF flows record equity ETF accounting for $10b of the overall $15b net new flows in May. ESG ETFs continue their strong appeal, with $43bn net flows year-to-date.
AUM YTD
Canada’s crypto asset ETF category enjoyed strong inflows in May.
Canada’s ETF industry took in $7billion in new assets last month, with crypto asset ETF inflows nearly equalling those that went into fixed-income ETFs, according to the latest Canadian ETF flows report from National Bank.
The crypto ETF category registered $1.3 billion in May inflows and fixed-income ETFs brought in $1.56 billion in assets for the same period. Link
The United States continues to attract the lion’s share of the exchanged-traded funds’ money. In the first five months of 2021, ETF net inflows are nearly $282 billion, dwarfing Japan’s $17.4 billion. Over the last three years, U.S. ETF net inflows were $1.2 trillion. Link
Noteworthy
The number of new entrants to the global exchange traded fund market is on track to match last year’s record tally as active managers seek to join an industry boom that shows no signs of slowing.
In the first five months of the year, 22 companies launched their debut ETF, according to data from TrackInsight. This comes on top of the 51 new providers it recorded last year, well ahead of the previous record of 34 reached in 2015 and 2017.
Andrew Jamieson, global head of ETF product at Citi, said the rollout of actively managed ETFs had been a game-changer and was likely to prompt many more asset managers to enter the fray in order to avoid being left behind. Link
ETF managers looking to launch crypto ETPs in the U.S. are experiencing a see-saw effect as recent regulatory scrutiny and comments from SEC chair Gary Gensler who recently dampened hopes of a swift approval of bitcoin ETFs this year.
Now, keep in mind there are positive signs as well coming from Gensler who is viewed by many as “in the camp” of approval given his background at MIT teaching digital asset and blockchain courses.
There are now a list of some dozen bitcoin ETF applications from Fidelity, WisdomTree, Wilshire Phoenix, VanEck and First Trust SkyBridge. Joining the waiting game are a small but growing amount of ethereum ETFs, following filings for SEC approval by VanEck and WisdomTree in May. Link
A shift in ETF volumes away from RFQ platforms to exchanges will help improve market structure by providing a clearer picture of the true liquidity available, according Daniel Izzo, CEO of market maker GHCO.
He further opined that there would not be as many issues with reporting if all trades took place on the exchange while in many cases, brokers would not receive the best prices from market makers. GHCO is currently in the process of rolling out the next phase of its plans to disrupt the European ETF ecosystem by offering prices in the OTC market. Link
ChinaAMC (HK) has completed its takeover of BMO Global Asset Management’s seven Hong Kong ETFs and plans to use the acquisition to expand its market share in the territory’s HK$1tn ($128.8bn) Mandatory Pension Fund.
The $560m in assets held in the seven ETFs will add to ChinaAMC’s total $2.89bn in ETF AUM across its existing 18 Hong Kong-listed ETFs. As well as trying to grow assets in the BMO ETFs, ChinaAMC is also planning to diversify its existing ETF product range beyond greater China, citing more demand for less-mainstream ETFs. Link
The Federal Reserve has begun the process of winding down its purchasing of ETFs, which it initiated last March. According to a statement issued on 2 June, the US central bank will offload the passive funds it bought as part of the Secondary Market Corporate Credit Facility (SMCCF), although it already ended its purchasing of ETFs on 31 December 2020. Link
Hong Kong Exchanges and Clearing moved to waive trading tariffs and minimum stock settlement fees from May 31 in a bid to “enhance its ETF market structure and drive liquidity to Hong Kong-listed ETFs”, said Brian Roberts, HKEX’s head of exchange-traded products.
As of April, the 16 Hong Kong-listed fixed income and money market ETFs had a market capitalisation of HK$45bn ($5.8bn), representing 11.2 per cent of the ETF market. HKEX has identified 29 fixed income and money market ETFs as eligible for fee waivers.
If an ETF is available in more than one currency, the bourse counts it as one product. Among them, Premia Partners has nine eligible products. It is followed by CSOP Asset Management, which has eight products. Of the 29 products, 15 are focused on China fixed. Link
