A regulatory review of index providers by the U.S. SEC seems to have jumped the pond.

Now the IOSCO has launched a consultation looking into the relationship between European asset managers and index providers in an effort to uncover possible conflicts of interest.

Fund Launches and Updates

 

EMEA

Amundi has outlined plans to merge two Lyxor ETFs with its Paris-aligned equivalents.

The Lyxor MSCI EMU ESG Leaders Extra UCITS ETF (EESG) and the Lyxor MSCI Japan ESG Leaders Extra UCITS ETF (JPXC) will merge with the Amundi Index MSCI EMU SRI PAB UCITS ETF (SRHE) and the Amundi Index MSCI Japan SRI PAB UCITS ETF (JARI), respectively. ETF Stream

AXA Investment Managers has introduced its second ETF in Europe with the launch of actively managed AXA IM ACT Climate Equity UCITS ETF on Deutsche Börse Xetra, TER 0.70%. ETF Strategy

DWS has switched the underlying indices to incorporate Paris-aligned benchmark criteria.

Effective 1 November, the Xtrackers ESG USD Corporate Bonds UCITS ETF (XZBD) will change its name to the Xtrackers USD Corporate Bond SRI PAB UCITS ETF and the Xtrackers ESG USD Corporate Bond Short Duration UCITS ETF (XYLD) will be renamed the Xtrackers USD Corporate Bond Short Duration SRI PAB UCITS ETF. ETF Stream

DWS has launched the Xtrackers Eurozone Government Bond ESG Tilted UCITS ETF (XECB GY), TER 0.12% and the Xtrackers Eurozone Government Green Bond UCITS ETF (XGEZ GY), TER 0.18%. Both funds have been listed on Deutsche Börse Xetra. ETF Strategy

HSBC Asset Management has introduced four new ETFs: the HSBC MSCI World Value ESG ETF (HWVS), TER 0.25%; the HSBC MSCI World Small Cap ESG UCITS ETF (HWSC), TER 0.25%; the HSBC MSCI Emerging Market Value ESG UCITS ETF (HEMV) and the HSBC MSCI Emerging Market Small Cap ESG UCITS ETF (HESC), both with TERs of 0.35%. ETF Stream

Morgan Stanley is set to close the MS Scientific Beta US Equity Factors UCITS ETF (USEF) with less than $1m AUM seven years after it launched. ETF Stream

 

AMERICAS

In Canada, Brompton Funds Limited launched the Brompton Enhanced Multi-Asset Income ETF (“BMAX”) on the Toronto Stock Exchange. Montreal Gazette

In the U.S., Van Eck Associates Corp. launched the VanEck Green Infrastructure ETF (RNEW) whichwill track the Indxx US Green Infrastructure-MCAP Weighted Index.  Expense ratio is 0.45%. Yahoo Finance

Full list of U.S. launches: 

 

ASIA-PACIFIC

CSOP has launched the CSOP CSI Brokerage Index Daily (2x) Leveraged Product (7252 HK) on the Hong Kong Stock Exchange. The ETP comes with an expense ratio of 2.00%. ETF Strategy

Also, in Hong Kong, Global X has launched the Global X FTSE China Policy Bank Bond ETF (3041 HK), expense ratio of 0.30%. ETF Strategy

UOB Asset Management has teamed up with its Chinese joint venture partner Ping An Fund Management to roll out the first master-feeder ETF operating between the Singapore and Shenzhen stock exchanges.

The Singapore-listed UOBAM Ping An ChiNext ETF feeds into the Ping An ChiNext ETF, a Shenzhen-listed ETF which will list on the Singapore Exchange on November 14. Financial Times

 

Flows

Athanasios Psarofagis, ETF analyst at Bloomberg Intelligence, has identified the ‘Vanguard effect’ in Europe finding that the cheapest ETFs are rapidly gaining market share.

Flows into ETFs have surpassed those of mutual funds every month this year as Vanguard’s growth pressures industry fees and in September alone, ETFs priced at 10 bps or less took in over EUR7 billion, their strongest month on record. Over the past six months, ETF priced at 20 bps or less have taken in EUR22 billion. Collectively, the other buckets shed EUR28 billion.

Historically, European ETFs charging 10 bps or less haven’t taken in the most flows, but recent market declines have spurred a shift toward the cheapest funds.

The group’s share of the region’s ETF assets has grown to 25% from 19% at the end of 2020. ETF Express

 

Noteworthy

Index providers

In an effort to uncover possible conflicts of interest, the International Organisation of Securities Commission (IOSCO) has launched a consultation looking into the relationship between European asset managers and index providers, as reported by Theo Andrew at ETF Stream.

IOSCO has four concerns: the role of asset managers and index providers, index providers’ provision of indices, the impact of administrative errors on investment funds and potential conflicts of interest, e.g., where an index provider invests or provides seed funding to a fund. Asset managers and index providers have until 26 November to submit their responses. ETF Stream

Fossil fuels

BlackRock and Vanguard are among a number of financial institutions that have told a UK inquiry they will continue to invest in fossil fuels and do not subscribe to the view that climate change plans require an end to new coal, oil and gas investment. 

Trying to take a neutral stance, this comes after Republican states in the U.S. pulled approximately $1bn from BlackRock when Republican attorneys-general and state governors accused BlackRock and other institutions of staging a “boycott” on the fossil fuel sector. Financial Times

Growth ambition

Amundi has launched a 10-strong range of ETFs in Ireland in a sign of the company’s ambitions to grow its business and compete with market leader iShares.

The new launches push this development further and give the firm’s clients the option of products that can benefit from favourable tax arrangements in Ireland.

Detlef Glow, head of Europe, Middle East and Africa research at Refinitiv Lipper, said the products’ high US exposure meant they would be able to take advantage of a 50 per cent reduction in withholding tax paid on dividends for ETFs in Ireland. Financial Times

 

Additional Reads

FCA to make 15 hires to power crypto regulation catch-up. ETF Stream

Synthetic ESG funds found to hold polluting collateral. Financial Times

Nearly $140bn has poured into retail money market funds so far in 2022, according to the Investment Company Institute, taking the size of these vehicles to $1.55tn after 10 straight weeks of fresh investment. Inflows have totalled almost $36bn in the past three weeks alone. Financial Times

Columbia Threadneedle Investments, with $598 billion in assets, has released the results of a recent ETF adviser survey which polled 113 advisers show smart beta is not dead. ETF Express

Two dozen single-stock ETFs have debuted in the U.S. since July but combined, the products only had $156.5mn in assets as of September 15. Financial Times

Wall Street sinks Billions into ETFs on both ends of Treasury yield curve. Bloomberg

 

From behind the desk with Andrea Murray

This will be a short one this week as I need to head off to the ETF Stream Awards judges lunch today.

And speaking of ETF Stream, an interesting article by Jamie Gordon around the increasingly uncertain acquisition of Brown Brothers Harriman’s investor services arm by State Street apparently due to regulatory related delays.

It’s been more than a year from the original $3.5bn deal was announced and being an ex-BBHer (Boston) and still in contact with many friends still there or whom have left, this news is not shocking in the least.

I’m sure those at BNY Mellon are happy about the news as they will be able to retain their coveted top/largest custodian spot and those at BBH who have been waited for the rumoured “big bonus” when the acquisition is finalised are probably quite frustrated with this long waiting game.

As they say, time will tell what the final result is.