S&P Global is in advanced talks to buy IHS Markit for about $44 billion amid increasing demand for data particularly from the finance industry. An announcement could come as early as today, the person added, declining to be identified because the information isn’t public. Bloomberg

Texas-based Dimensional Fund Advisors intends to convert six of its mutual funds, with total assets of $20bn, into actively managed ETFs during 2021. They recently launched their first ever standalone ETFs.

Converting an existing mutual fund into an ETF rather than simply launching a sister vehicle has the advantage of maintaining a track record and immediately having the scale needed to attract large investors.

DFA will become the 12th largest ETF manager in the US, ahead of Goldman Sachs, Fidelity and DWS, according to data from TrackInsight. Link

The CFA Institute has been forced to defend its efforts to create a global standard for ESG investing after a number of large asset managers rejected the CFA’s initiative, saying it would add confusion at a time when global policymakers’ responses to ESG are still developing.

Investors are demanding more information about ESG risks in their portfolios given the explosion of interest in sustainable investing. Yet a lack of standards means that managers’ disclosures vary wildly, fuelling greenwashing concerns. FT

Goldman Sachs Group Inc. is planning a European stock trading platform to ensure its clients can still buy and sell shares even without a post-Brexit agreement to allow dealing in London.

GS applied to French regulators to start a Paris-based trading venue called SIGMA X Europe and intends to open before Jan. 4 subject to regulatory approvals.

Goldman joins rivals including Cboe Europe and London Stock Exchange Group Plc in forming venues in European cities to ward off disruption at the end of the year, when Britain loses automatic rights to host trading in most EU shares for clients inside the bloc. Bloomberg

Lion Global Investors and OCBC Securities have partnered to launch Singapore’s first technology-focused exchange traded fund, rolling out a new ETF that tracks the recently launched Hang Seng Tech index.

Combined assets under management for Hong Kong ETFs tracking the Hang Seng Tech index stood at HK$9.33bn (US$1.2bn) on November 19, according to data from the Hong Kong Exchanges and Clearing website. FT

S&P Dow Jones Indices announced plans to include Tesla on the S&P 500 benchmark month and will be the biggest on record. Approximately $4.6tn in passive fund assets track the S&P 500 and it is expected that Tesla’s inclusion on the index may create $51bn of demand for shares from these investment vehicles.

Trading houses, market makers and fund managers said they were expecting extraordinary volumes on December 18, the last trading day before Tesla formally joins the S&P 500. FT

Fund in Focus

There have been plenty of articles about how Tesla’s upcoming inclusion in the S&P 500 will impact a slew of products tied to the index.

Mention of heightened stock volatility and recent performance prompted us to look at this weeks’ fund in focus, the Leverage Shares 2x Tesla ETP.

Launched in 2020, the Leverage Shares 2x Tesla ETP tracks the iSTOXX Leveraged 2X TSLA Index, which is designed to provide 2x the daily return of Tesla stock, adjusted to reflect the fees and costs of maintaining a leveraged position in the stock. It invests directly in the underlying Tesla, Inc. stock and uses margin to purchase additional shares of Tesla.

Based on Leverage Shares, the fund has returned 82.53% for the month and has a TER of 0.75%. On the other side, the Leverage Shares -1x Tesla ETP is down 30.65% for the same period. Leverage Shares Product List