ETF TV News for 18 January 2021: Three new issuers and a focus on Russia

Dan Barnes Welcome to ETF News – your updates on the latest issues, exchange traded products and funds. I’m Dan Barnes and I’m going to be discussing the exchange traded funds and products that came to market over the past week with Deborah Fuhr. Deborah, welcome back to the show.

Deborah Fuhr Thank you.

Dan Barnes Tell us, what are the numbers looking like over the past week and have we seen any new issuers come to market?

Deborah Fuhr So last week we saw 20 new ETFs being listed. There were 11 issuers, four of the ETFs were active, four were buffer products that we talked about a few weeks ago, five provided exposure to China, four were new commodity products, two were fixed income, one Bitcoin, five thematics, one leverage, and one leveraged and inverse.

And when we look at where geographically they were placed, we saw six coming to market in the US, eight in Europe, five in Asia and one in Latin America. When we see the new issuers, it is interesting. There’s a little bit of a Russia theme here. So Norilsk Nickel has backed a company called Ridgex that launched four new commodity products, so gold, silver, platinum and palladium. They plan to, in the future do you nickel and copper. We also have Dohod Investment Company that launched a dividend-focused ETF for Russia, listed on the Moscow exchange, and then XP Inc, an issuer in Brazil launched an MSCI Europe product, the first product in Brazil for exposure to Europe. So a number of new trends out there. I think the other thing that’s interesting is CoinShares, which has a family of crypto products currently in Sweden under the XPT brand, has launched a new family of products in Switzerland, and those would be coinshare products that are physically backed, and they plan to launch seven more products going forward. So they’ll replicate the exposures they have in Sweden under a new wrapper in Switzerland.

Dan Barnes Obviously, we’ve seen the case for both cryptocurrencies and some precious metals made this a sort of inflation hedge. ESG tends to be seen as longer term investment goals. Do you think that there are any clear investment strategies which we’re seeing play out which are indicative of why these exchange traded products are coming to the market at the moment?

Deborah Fuhr Well, I think part of it is looking at the performance of crypto assets and the price movements. Many people want to find an easy way to get that exposure. And the fact that for many years, people have been making filings with the SEC to try and bring products to market and haven’t succeeded. So the fact that we do have products in Europe and you can bring products out, I think we’re going to see more products come to market here in Europe in the crypto space. When we think about commodities, last year was a phenomenal year for investments into gold specifically. And people see it as a safe haven as well as an inflation hedge. I think people are concerned about the printing of money stimulus in the market, and do we see inflation going forward this year? So I can see why there would be more products coming to market. And it’s also a new issuer backed by a company that’s involved in the space.

And then if we think of ESG, that clearly is an area where, from a regulatory perspective, many of the asset owners are being encouraged or almost forced to invest along these lines. But I think many, because of COVID-19, and what they saw in terms of both the impact on the environment of less planes, trains and automobiles, and also Black Lives Matter and other social movements we’ve seen – clearly, people want to move towards ESG and we are seeing a greater adoption in the US. If we look at ESG, last year the assets grew by over 200%, so it’s really been an area off of a low base, but clearly with significant inflows, and I expect that to continue in 2021.

Dan Barnes Sticking to the theme of what are investors looking for, we’ve seen another 18 cross-listings I think this week, which again indicates that investors are getting better access to these products.

Deborah Fuhr Exactly and depending on the market, sometimes it’s required that things are cross-listed. At other times they will just be registered for sale. Cross-listing tends to make it easier for retail type investors and retail platforms to offer exposure, because they usually only have connectivity to the local exchange. So cross-listings, whether it’s around Europe, to Asia or Latin America, has become increasingly important.

Dan Barnes That’s great. Debbie, thank you so much.

Deborah Fuhr Thank you.

Published on January 26, 2021