Semi-Transparent ETFs are dead
This week T.Rowe Price launched a bunch of actively managed ETFs. Nothing unusual about that but in this case, these funds are fully transparent vs their existing funds which were semi-transparent. When was the last time anyone launched a semi-transparent ETF?
A long time ago is our guess.
Semi-transparent ETFs have only $4 billion in assets versus $364 billion in transparent active ETFs, according to Bloomberg. Despite starting life with a burst, it looks like investors have voted and have said no thanks to the semi-transparent structure.
This was always going to happen as the very nature of being “semi-transparent” goes against the DNA of what ETFs are meant to be. The semi-transparent vehicle had a short life, but we think the end is nigh.
Fund Launches and Updates
EMEA
21Shares has introduced an exchange-traded product, providing investors with single-asset exposure to Lido DAO’s liquid staking ecosystem. theblock
Valour has extended its range of crypto ETPs with the launch of a carbon-neutral bitcoin exchange-traded product. The Valour Bitcoin Carbon Neutral ETP (1VBT) is listed on the Deutsche Boerse with a total expense ratio (TER) of 1.49%. etfstream
AssetCo is writing down the value of Rize ETF by circa £5m and said the business remains “materially behind plan” in its latest set of half-year results.
The group, which took a majority stake in Rize ETF in July 2021, said the business’s thematic focus has been set back by the advent of the war in Ukraine and “subsequent market jitters” etfstream
Amundi launches Euro Government Tilted Green Bond UCITS ETF. The fund It provides exposure to Euro Investment Grade Government bonds with a higher proportion of sovereign Green Bonds so they make up at least 30 per cent of the index. etfexpress
Ilmarinen, a Finnish pension insurance company has invested over €2.7bn in two climate-focused exchange traded funds launched by BlackRock.
Ilmarinen announced that it has allocated €2bn to a US fund and €745m to a Japanese fund, acting as an anchor investor in both strategies. ipe
AMERICAS
Amplify Investments, sponsor of Amplify ETFs, and ETF Managers Group on Monday announced a definitive agreement under which Amplify will acquire ETFMG’s exchange-traded fund lineup, which has assets under management totaling more than $3.5 billion. pionline
Blackrock has filed with the SEC for the formation of a spot bitcoin (BTC) ETF.
To be named the iShares Bitcoin Trust, the fund’s assets are to “consist primarily of bitcoin held by a custodian on behalf of the Trust,” according to the filing. The custodian will by crypto exchange Coinbase (COIN), said the filing. coindes
T. Rowe Price launched five new actively managed stock exchange-traded fund a departure from its previous five active non-transparent ETFs. ETF.com
ASIA-PACIFIC
China-headquartered CSOP Asset Management is set to launch its fifth ETF – CSOP iEdge Southeast Asia+ TECH Index ETF on the Singapore Stock Exchange (SGX).
SQQ/SQU will adopt a representative sampling strategy to track the performance of the iEdge Southeast Asia+ TECH Index designed to capture the investment opportunities in the technology-related economy of the Southeast Asia and India market. etfexpress
Exchange Traded People
Flows
Assets in Taiwan’s ETF market have hit historic highs as the domestic equities market entered a technical bull market.
Total ETF assets held by Taiwanese investors, including holdings in over 220 locally domiciled and overseas strategies, reached a new peak of NT$3.02 trillion (US$423.8 billion) on June 12, latest market data cited by the publication show.
The figure was up by NT$660.5 billion, or 27.8%, from the end of 2022. ignitesasia
EUROPE
- ETFs industry in Europe gathered net inflows of $7.93 Bn in May.
- YTD net inflows in 2023 of $61.89 Bn are third highest on record, after YTD net inflows of $95.18 Bn in 2021 and YTD net inflows of $68.77 in 2022.
- 8th month of consecutive net inflows.
- Assets of $1.56 Tn invested in ETFs industry in Europe at the end of May.
- Assets increased 9.9% YTD in 2023, going from $1.42 Tn at end of 2022 to $1.56 Tn.
USA
- ETFs industry in the United States gathered net inflows of $44.05 Bn in May
- YTD net inflows of $154.34 Bn are the fourth highest on record, the highest
- YTD net inflows were $399.09 Bn YTD in 2021 and YTD net inflows of $263.44 Bn in 2022.
- 13th month of consecutive net inflows.
- Assets of $6.96 Tn invested in ETFs industry in the United States at the end of May.
- Assets increased 6.9% YTD in 2023, going from $6.51 Tn at end of 2022 to $6.96 Tn. ETFGI
Noteworthy
BlackRock Bitcoin ETF is the ‘Real Deal’. Lots of excitement this week in crypto land as BlackRock threw its hat in the ring. Speculation is rife about whether this will be the one that finally gets approved by the SEC. yahoo
The active-passive debate is dead: How investors are using active ETFs. Not sure I agree with this title but interest enough piece. etfstream
Active ETFs punch above their weight at USD44bn in 2023 according to a new report from Bloomberg Intelligence (BI) on the ETF sector.
The report reveals flows into active ETFs have been a strong theme this year, at USD44 billion. Legacy asset managers like DFA, JPMorgan, Capital Group and American Century have led the charge into active ETFs, notes BI, and the firm expects these asset managers to stay the course. etfexpress
Movers and Shakers
DWS has hired Shawna MacNamara from Janus Henderson to join its US ETF sales team
WisdomTree Board chair ousted following shareholder campaign. During the annual general meeting held on June 16, Frank Salerno lost his re-election bid to Tonia Pankopf, the nominee put forward by ETFS Capital.
From behind the Desk
Everyone starting off in their career wants to work for a BlackRock or JP Morgan type firm. Whilst there is nothing wrong with that, what these people are failing to appreciate is that you live within a very tight box when working for such firms and what you experience is probably a 10th vs what you would experience if working for a smaller firms.
You don’t get to “challenge the status quo” at these places or “think outside the box”, instead you operate within the confines of the machine. If you have an entrepreneurial spirit then that will quickly be extinguished.
Fortune favours the brave, a career is a long time so look for meaningful experience rather than big name experience.
In the long run it will be worth it.
