Digital Assets firm Eqonex launches its first European ETP entrant.

European ETF flows were not so lovely last month and in the US, more direct indexing growth as First Trust plans to acquire Veriti Management.

Fund Launches and Updates

 

EMEA

 

DWS has listed the Xtrackers MSCI China A ESG Screened Swap UCITS ETF on the Deutsche Börse and the London Stock Exchange. Listings on other European exchanges are planned. ETF Express

Digital assets group Eqonex has launched its investment product business with the unveiling of the Eqonex BTC Tracker ETN (EQ1B).

EQ1B is listed on the Deutsche Boerse with a total expense ratio of 0.89% and is currently only available to investors residing in Germany. ETF Stream

HSBC Asset Management has launched four new ETFs on the London Stock Exchange: the HSBC Europe Sustainable Equity UCITS ETF, the HSBC USA Sustainable Equity UCITS ETF, the HSBC ASIA Pacific Ex Japan Sustainable Equity UCITS ETF, and the HSBC Japan Sustainable Equity UCITS ETF. ETF World

iShares has listed two ETFs on Xetra — the iShares Digital Entertainment and Education UCITS ETF USD (Acc), TER 40bps and the iShares Physical Gold EUR Hedged ETC, TER 25bps. ETF World

THE AMERICAS

In theU.S.,FranklinTempleton announced that it will rename 13 of its ETFs in the U.S. which will include removing the LibertyShares, Liberty and LibertyQ naming conventions from the platform effective August 1, 2022.

In addition, the firm recently announced plans to reposition and rename four index-based ETFs. Businesswire

Last week Global X ETFs launched the Global X Interest Rate Hedge ETF (IRHG) and the Global X Interest Rate Volatility & Inflation Hedge ETF (IRVH).

Both products are Global X’s latest additions to its options-based ETF suite, which now includes 14 funds totalling over $9.7 billion in AUM. Both IRHG and IRVH have expense ratios of 0.45%. PR Newswire

Full List of U.S. ETF Launches:

Flows

 

The slide for ETFs gained momentum in June as markets took a turn for the worst. For the first time in a very long time (maybe ever) European ETPs suffered net outflows for the month of $605mn vs the previous months inflows of $1.6bn.

Across asset classes, Equities gained $2.9bn of net inflows during the month but Fixed Income suffered net outflows of $2.3bn and Commodities net outflows of $1.4bn.

Despite all the recent turmoil in the Digital Asset space, Cryptocurrencies managed to gain net inflows of $41mn during the month.

In terms of individual performers, iShares were finally knocked off their tree by Vanguard who were the top performer in terms of assets gained with $1.3bn of net inflows.

Lyxor also had a good month with $1.1bn of inflows. iShares only managed to gain $225mn of inflows. On the other side, the worst providers were all big names – Invesco, Amundi, WisdomTree, Pimco and DWS all suffering from outflows. Michael O’Riordan analysis

 

 

Investors have pulled $50bn from emerging market bond funds this year as the net outflows from EM fixed income funds are the most severe in at least 17 years.

The combination of soaring global inflation, tightening central bank monetary policy and Russia’s invasion of Ukraine has culminated in “a perfect storm” for emerging market debt. Financial Times

Noteworthy

 

In the U.S., the direct indexing trend continues to grow as First Trust becomes the latest sizable asset manager to acquire a direct-indexing provider.

Effective at month end, First Trust recently reached a deal to buy Veriti Management, a Boston-based direct-indexing firm with about $1bn under management. The transaction is expected to close July 31.

With the deal, First Trust will follow in the footsteps of Vanguard, BlackRock, Morgan Stanley, Morningstar, Franklin Templeton and Pershing, all of which have bought smaller firms to add direct indexing capabilities since the start of 2020.

Charles Schwab earlier this year rolled out its own direct indexing platform after acquiring the tech assets of Motif Investing. CitywireUSA

A reminder of how long it takes to fix an industry issue as the FT once again reported on old news that pressure is growing on regulators to require ESG data and ratings providers to be regulated.

Why? Shocker alert — growing concerns about greenwashing in the asset management sector.

Some industry participants believe that because data providers are playing an increasingly important role in the investment industry, they should be subject to the same regulatory scrutiny as other parts of the financial services sector. Financial Times

A bit of preying on the young as asset managers and brokerages rush into wealth management as a rising tide of young DIY investors come into inheritances via the “great wealth transfer”.

We are so close! Growth of wealth management is set to outpace that of asset management by an average of 2% every year until 2030, according to research by Bain and Company and overall is expected to swell 67% from $137tn under management in 2021 to almost $230tn globally by 2030.

Asset management is expected to grow by less than 40 per cent from $109tn to $152tn under management over the same period.

“We’re betting that those self-directed investors will seek advice”, said Stephen Bird, the chief executive of old school asset manager Abrdn.

At the end of 2021, Abrdn bought the UK’s second-largest DIY investment firm, Interactive Investo, to grab a younger, more tech-savvy customer base. Financial Times

Additional reads

 

UK Fund managers lobby for approval of blockchain-traded funds. FT

Two synthetic China ETFs from Invesco with combined assets of $232m are currently carrying swap fees providing investors with significant excess returns as a result. ETF Stream

In the U.S., the SEC releases a statement on the risks of the upcoming launch of inverse and leveraged single stock ETFs. SEC.gov

Both US and European investors poured record sums into the Chinese market, with US-listed ETFs taking in a net $4bn and those domiciled in the EMEA region bringing in $1.8bn. Financial Times

More than 21% questioned in an Oxford Risk survey found that wealth managers in the United Arab Emirates, Saudi Arabia, Qatar, Bahrain, Egypt, Kuwait, and Oman, believe there will be a dramatic expansion in the use of mutual funds and ETFs. ETF Express

Investor appetite in the China-South Korea ETF cross-listing scheme is being questioned. Financial Times

Product development in Canada has been healthy for the first half of 2022 with 80 new ETFs but inflows are significantly lagging the first half of 2021 ($17bn vs $30bn). Wealth Professional Canada

British retail investors are persisting with US investments, despite the S&P 500 losing 20 per cent this year. Financial Times

Investors ploughed $1.5bn into Cathie Wood’s flagship ARKK ETF in the first half of 2022, even as the fund has dropped more than 50% since the start of the year. Financial Times

Investors in mainland China and Hong Kong began trading ETFs across each other’s markets last week, with strategies from the mainland far outnumbering their Hong Kong-listed counterparts. Financial Times

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