European markets were positive last week with an increase in the FTSE 100 of +1.41%, the FTSE 250 +3.94%, Stoxx Europe 600 +3.02% and the DAX +4.63%. U.S. equities were up +3.04% for the same period.

Spot VIX is -2.30% for the week and closed Friday at 27.51.

WTI Crude July contracts closed on Friday at $35.49 a barrel, up 6.74% for the week.

ETF Launches and Updates

 

KraneShares launched its first China fixed income ETF in Europe which tracks the Bloomberg Barclays China Treasury and Policy Bank 9% Capped index. Known as the KraneShares Bloomberg Barclays China Bond Inclusion UCITS ETF, KBND, is listed on the LSE with a total expense ratio of 0.35%.

HANetf, a white-label ETF and ETC platform expanded with the launch of its first five ETFs on the SIX exchange in Switzerland. The products listed below offer investors transparent and liquid exposure to long-term social, medical and technological megatrends.

· EMQQ Emerging Markets Internet & Ecommerce UCITS ETF (EMQQ)

· The Medical Cannabis & Wellness UCITS ETF (CBDX)

· HAN-GINS Cloud Technology UCITS ETF (SKYY)

· HAN-GINS Innovative Technologies UCITS ETF (ITEK)

· HAN-GINS Indxx Healthcare Innovation UCITS ETF (WELL)

The range of ETFs is also available on the LSE, Borsa Italiana and Xetra and are passported for sale in Luxembourg, Austria, Finland and the Netherlands.

Lyxor Asset Management is to streamline its ETF offering by folding 13 ComStage ETFs into Lyxor ETFs on July 3.

Société Générale, the French lender that owns Lyxor, in 2018 agreed to buy the German lender’s equity markets and commodities unit, which houses its ComStage ETF business. At the time the deal was announced, ComStage managed close to €9bn in assets.

First Trust further expanded its range of thematic ETFs with the launch of two new products covering cybersecurity and biotechnology. The new funds – formally called First Trust Nasdaq UCITS Cybersecurity ETF (CIBR) and the First Trust NYSE Arca Biotechnology UCITS ETF (FBT) – are designed to offer a low cost, and liquid method of accessing these trends.

Both funds have a total expense ratio of 0.60%, are listed on the LSE. 

Flows and Performance

 

The $2.6bn WisdomTree WTI Crude Oil ETP, CRUD, Europe’s largest oil ETP, is seeing outflows for the first time in months following the decision to temporarily suspend creations (more details in prior week report).

CRUD has seen $234m outflows over the past two weeks following months of inflows as bullish investors bet on recovering oil prices. In April, there were over $1bn inflows into CRUD before WisdomTree announced a temporary halt to creations on 30 April.

The Fed’s announcement that it would begin buying corporate bonds and ETFs that track the market prompted a flood of cash to flow into the asset class. The investment-grade bond ETF run by iShares, ticker LQD, has increased to a record $49.5bn as of Friday 29 May.

Since the announcement of the bond buying programme on March 26, the total assets in the iShares high-yield bond ETF, ticker HYG, have also hit a record of $25bn.

Fund Performance and Flows

Top 3 Best Weekly Performers in the UK, excluding leverage/inverse:

WisdomTree WTI Crude Oil 2 Yr +13.21%

WisdomTree WTI Crude Oil 3 Yr +12.02%

Lyxor S&P 500 Banks UCITS ETF +9.59%

Top 3 Worst Weekly Performers in the UK

WisdomTree Carbon -1.92%

iShares Physical Platinum ETC -1.78%

Invesco Physical Platinum ETC -1.69%

Top 3 Weekly UK Inflows

PIMCO US Dollar Short Maturity UCITS $234.3m

iShares USD Treasury 0-1 Yr UCITS ETF USD (Acc) $188.1m

Lyxor US Tips DR UCITS ETF Monthly Hedged GBP $52.4m

Top 3 Weekly UK Outflows

WisdomTree Long CHF Short GBP -$56.7m

WisdomTree WTI Crude Oil GBP Daily Hedged -$53.5m

iShares USD Treasury 1-3yr ETF EUR Hedged -$30.4m