Deborah Fuhr: Hi, I’m Deborah Fuhr, this is ETF TV, and today we’re going to be speaking about the Israeli market. Joining me today is Gregory Berthier, head of product in ETF Index Solutions for Lyxor International Asset Management. Welcome.
Gregory Berthier: Thank you. Good morning.
Deborah Fuhr: So Lyxor has just listed an ETF in Tel Aviv. Can you tell us a bit about the product and why you decided to list there?
Gregory Berthier: We have started listing our first ETF in Tel Aviv last week on the 20th of April. It’s an ETF aiming at tracking Robotics and AI Index, which is part of our thematic range. We entered into the ETF Israeli market four years ago with a partnership with 4F Distribution International which is our local distributor, mainly aiming at reaching institutional clients who can trade ETFs outside of Israel on international stock exchanges. And we have seen a very interesting growth in the markets reaching out. There are more than 30 billion of assets in foreign ETFs and listing locally is a natural evolution for us. A thematic ETF actually aims at capturing a long-term cycle theme, in opposition with sectors that are more short-term tactical location, so it better suits our main investor base, which are our wealth managers and retail investors who want to have less volatility and long-term cycle and long-term investment. So we’ll continue the listings in the coming weeks and months with other ETFs in our thematic range, of which we currently have digital economy, water and new energy. So we will offer a comprehensive range for the local markets.
Deborah Fuhr: Up until recently, it wasn’t possible to bring foreign ETFs to Israel. All of the local products used to be notes, but they recently changed them. Can you talk a little bit about how that happened and when it happened?
Gregory Berthier: The initiative came from the local authority, which now allows having dual listings for companies. If they are listed in one of their partnering stock exchanges, fx NASDAQ, or the Hong Kong Stock Exchange, or LSE in Europe, so whatever company is listed on one of these exchanges, it’s possible to be eligible for listing in Tel Aviv. So our ETF has companies listed on LSE, you can apply for a dual listing, which is a very simple process as long as you meet certain criteria like size of liquidity or track record. This is changing the framework of the investments in Israel, because these ETFs which could be on offer to Israeli institutional investors are now offered to every single Israeli investor from tier two institutional players and even retail investors.
Deborah Fuhr: What are your plans for the rest of 2021 beyond just Israel? Can you talk generally about your focus for the rest of the year?
Gregory Berthier: Of course, so we’ll will continue working on our main pillars within each of our ETFs, which are energy and climate, thematic investments and core investments, as we are actually looking at long-term investors like wealth managers who are, obviously, the growing part of the investment base on ETFs in Europe and all over the world, these investment areas are the ones matching their needs, so long-term investment. So when we’re talking about ESG and climate, we are talking about several ranges in our offer that we are still expanding. We currently have 78 thematic ETFs, including green bonds, social media and the digital economy, water and new energy, and we’ve also extended our core range of products that are easily accessible, at a low price, with indices to every investor as market access products, which are currently mainly on the equity side, which will be extended to the fixed income side with a very simple product.
Deborah Fuhr: That’s great. Thank you so much for joining us today.
Gregory Berthier: You’re welcome. Thank you for having me.
Deborah Fuhr: In other news, we saw 20 new ETFs listing last week. They were from 16 different issuers. Some of the interesting things that happened last week, a quarter of all the listings were in the crypto or digital space, so we saw another Bitcoin product, three Ether products and one Ethereum. So Ether would be the second largest, digital currency with about 290 billion in assets. Bitcoin has about a trillion. We also saw that AdvisorShares has listed a restaurant and hotel ETF. So they’re really banking on the idea that we are recovering from the pandemic and people are going to go back to eating out and traveling.
The other products that have come to market are thematics, a little bit of China and a little bit of leverage and inverse last week. But we definitely are seeing, especially in Canada, the advent of a lot of digital products coming from Evolve, from 3iQ, and from Purpose, and also CI, so we’ve seen a number of new issuers launching products in Canada and that really has become kind of the hotbed of ETFs that are providing exposure to digital.
So thank you for joining us. If you’re interested in more details on the products that have been listed this week or want to watch previous episodes, go to ETFTV.NET and you can subscribe to get our newsletter.