State Street Global Advisors, SSGA has finally come out to address merger rumours and ESMA proposes amended SFDR rules. And very few global fund launches last week which is probably good given futures-based Bitcoin ETFs stole most of the headlines. 

Fund Launches and Updates

 

EUROPE

DWS is adding an ESG filter to six more ETFs as well as slashing fees.

Effective 20 October, the latest round of index swaps will see all six ETFs track MSCI indices with some more than halving fees as the group expands its ESG range. Fund names and reduced TER listing can be found here.

Melanion Capital has launched the BTC Equities Universe Ucits and was listed in Paris on 22 October.

The ETF will provide investors with bitcoin exposure by tracking the Melanion Bitcoin Exposure Index, a custom basket of 30 equities that are the most sensitive to the price of bitcoin. GHCO has been selected as the liquidity provider. Link

AMERICAS

In a blink of an eye, there are already two U.S. Bitcoin futures ETFs with more to come. The second entrant, the Valkyrie Bitcoin Strategy fund, began trading on the Nasdaq exchange on Friday under the ticker BTF. Link

Grayscale filed to convert their bitcoin fund into an ETF. Link

VanEck Bitcoin Strategy ETF is on deck and expected to have lower fees than its peers. It plans to use the ticker XBTF and will begin trading (today perhaps?) on the Cboe BZX Exchange.

The fund will only invest in cash-settled bitcoin futures traded on exchanges registered with the CFTC. Expense ratio is 0.65%. Link

Flows

Investors are dumping gold for cryptocurrencies as inflation picks up. More than $10bn has been pulled from the biggest gold ETF this year according to Bloomberg data. Link

Pent-up demand for the first U.S. Bitcoin exchange-traded fund drove assets held in the investment vehicle to more than $1 billion in just two days.

The ProShares Bitcoin Strategy ETF (ticker BITO) ended Wednesday with $1.1 billion under management after trading volume topped $1.2 billion. That’s the quickest that an ETF has reached the $1 billion mark, Bloomberg Intelligence data show. Link

Noteworthy

The European Securities and Markets Authority has developed new obligations for product disclosures under the SFDR.

As part of the proposals, ESMA said two new SFDR product categories should be created for funds that have an environmental objective.

 

 

 

After numerous rumours around a potential merger or acquisition with Invesco or UBS, State Street has finally come out and said there are no plans to relinquish its asset management arm.

 

The executives, speaking during the company’s third-quarter earnings call, declined to comment on reports that the manager had been in dealmaking talks with rivals about its fund business. Instead, they underscored how important the unit was for the company. Still sounds like a wait and see scenario. Link

Valkyrie launched on their own versions of a futures-based bitcoin ETF to less fanfare but as we know that was to be expected given ProShares achieved that first mover advantage on Tuesday.

The third product from VanEck is expected to begin trading and will be listed with a much lower expense ratio of 0.65%.

It will be interesting to see if that lower fee strategy works in terms of gathering volume and assets as the 3rd in line. Also, with expensive-to-run futures contracts, how far can a potential price war go? Link Price war reading here.

And finally, Invesco has dropped its plans for a competing futures-based product.

Although the launch of the Invesco Bitcoin Strategy ETF has been dropped, they said they will continue to work in partnership with Galaxy Digital to offer investors a full shelf of products with exposure to this transformative asset class, including pursuing a physically backed, digital asset ETF. Link

The hotly anticipated launch of a bitcoin ETF in the US leaves the UK out of step with some other major markets in maintaining its blockade on retail access to exchange-traded crypto funds.

US regulators follow Canada and European nations such as Germany and Sweden in giving the green light to ETPs linked to cryptocurrencies.

But access to this type of fund for UK retail investors remains blocked by the Financial Conduct Authority, which has said it would not authorise a fund that has exposure to crypto until it is satisfied with integrity of the underlying market.

The UK restrictions on these funds, which have attracted billions of dollars of investment in other jurisdictions, highlights the debate over whether the FCA’s reluctance to approve regulated vehicles for crypto investment results in retail investors turning to riskier avenues to access popular digital assets. Link

Additional reads

European ESG funds found not to charge higher fees. Link

GICS tweaks to impact ETFs — Pending changes to the GICS classification of stocks within the data processing and outsourced services subindustry could shake up three of the largest US sectors. Link

Crypto cash and carry trade offering big upside for some. Link

70 per cent of institutional investors believe demand for custom portfolio solutions will increase strongly, according to new research from SigTech. Link