BlackRock forecasts that assets managed by model portfolios will surge to $10 trillion (€9.1 trillion) over the next five years and PWCs prediction that one in six global asset managers will ‘fall to the wayside’ by 2027 sure make for interesting reading.

Who would wish to be in the position of the CEO at a small or mid-sized mutual fund business right now?

On the one hand you want to maintain the status quo and protect you margins as best as possible but on the other you see ETFs eating up your market share. Can you afford to ignore ETFs, do you hope they just go away or do you pivot and take a bet on the future?

Decisions, decisions, decisions.

Fund Launches and Updates

 

EMEA

 

Ossiam has expanded its Shiller ETF range with the launch of an actively-managed global equities ESG ET. The Ossiam ESG Shiller Barclays CAPE Global Sector UCITS ETF (5HGU) is listed on the Deutsche Boerse with a total expense ratio (TER) of 0.75%. etfstream

 

WisdomTree is closing three fixed income ETFs amid low demand from investors.

The three impacted ETFs are – €6.6m WisdomTree EUR Aggregate Bond ESG Enhanced Yield UCITS ETF, €2.6m WisdomTree EUR Government Bond ESG Enhanced Yield UCITS ETF, €1m WisdomTree European Union Bond UCITS ETF. etfstream

 

UBS has launched the S&P USA Dividend Aristocrats ESG Elite UCITS ETF, which tracks the S&P ESG Elite High Yield Dividend Aristocrats TRN Index. The new ETF is being listed across key European exchanges including Xetra, Borsa Italiana, London Stock Exchange and SIX Swiss Exchange. etfexpress

 

Franklin Templeton has announced the launch of two sustainable, thematic ETFs, the Franklin Future of Food UCITS ETF and Franklin Future of Health and Wellness UCITS ETF. These new offerings bring the total number of thematic ETFs to three and Article 8 SFDR compliant ETFs to 10 in the Franklin Templeton ETF range. etfexpress

 

AMERICAS

 

Fidelity plans to convert six mutual funds with a combined $13.2bn in assets into ETFs in November this year, a regulatory filing shows.

The funds are all actively managed, according to the filing, which lists the $5.2bn Large Cap Value Enhanced Index, $2.3bn Large Cap Growth Enhanced Index, $1.8bn Large Cap Core Enhanced Index, $1.7bn Mid Cap Enhanced Index, $1.6bn International Enhanced Index and $532mn Small Cap Enhanced Index funds. They will all convert to similarly named ETFs. FT

 

Innovator has added four funds offering exposure to the performance of the S&P 500 price index and the performance of U.S. Treasuries and also protect against losses of 10%, 20%, 30% and 40%, respectively.

The new products are Innovator Premium Income 10 Barrier ETF – July (JULD), Innovator Premium Income 20 Barrier ETF – July (JULH), Innovator Premium Income 30 Barrier ETF – July (JULI), Innovator Premium Income 40 Barrier ETF – July (JULQ). etftrends

ASIA-PACIFIC

 

Hong Kong Exchanges and Clearing has added almost three dozen new mainland China-domiciled exchange-traded funds for the Hong Kong-China ETF Connect, with the number of such strategies available to Hong Kong and foreign investors topping 100 for the first time.

The bourse operator will add 34 Chinese ETFs into the cross-border investment scheme on July 17. ignites

 

A podcast series focused on exploring the career journey of industry leaders within the ETF and Digital Assets space.

Get to hear their personal story and be inspired.

This week’s episode is with Anthony Rochte, Global Head of ETFs at Morgan Stanley Investment Management based in NY.

In this conversation we hear Anthony talk about – how his dream as a kid was to have his own business, how its important to build your own personal board of directors, why being able to control your mindset is critical and why paying his own way through college is something he is proud of.

CLICK to hear Anthony

 

Flows

 

Net inflows into European fixed income exchange traded funds rose to a new all-time high in the first six months of this year as investors sought to take advantage of increasing bond yields, according to BlackRock.

Bond ETFs listed in Europe, the Middle East and Africa pulled in a net $36bn (€32.9bn) from investors between January and June, up from the previous record of $33.8bn in the first six months of 2019. FT

Exchange traded funds are dominating passive inflows at a level not seen for 15 years, as investors turn to the products to navigate market volatility.

European passive funds have €69bn in net inflows over the first five months of the year, compared with outflows of €41bn for actively managed funds, according to Broadridge data. Ignites

Noteworthy

 

One in six (16%) asset management firms are predicted to disappear over the next four years as the industry faces a wave of consolidation, a survey from PwC has found. Investmentweek

 

BlackRock forecasts that assets managed by model portfolios will surge to $10 trillion (€9.1 trillion) over the next five years, up from around $4.2 trillion currently, Bloomberg reports.

Salim Ramji, global head of the US fund giant’s iShares arm and its index investments business, said that the model portfolio space is “going to be massive” and that this market segment is “the way in which more and more fiduciary advisers are doing business, and, as a result, that’s the way in which we’re doing business with them“. Bloomberg

 

The Central Bank of Ireland is engaging with market participants on the potential tokenisation of investment products, saying it sees cost benefits for exchange traded funds.

Darragh Rossi, head of fund service providers supervision at the Irish regulator, says the CBI is “very open” to the concept of tokenisation for ETFs. ignites

A battery of “star” fund managers have muscled their way into exchange traded funds for the first time as the in-vogue fund structure expands from its passive, index-tracking roots into actively managed strategies.

Investment houses’ rising appetite to unleash their “brightest and best” performers into the ETF world is also recognition that traditional mutual funds are rapidly losing market share, particularly in the US, and that ETFs appear to be the future. FT

From behind the Desk

 

Over 36 degrees in Southern Europe right now, the place is full of damn tourists and the mosquitos are definitely out to get us.

We love summer !