ETF TV News: Korean market sees multiple launches; we review 2020 in numbers

Dan Barnes Welcome to ETF TV News, I’m Dan Barnes. We’re going to be running through the ETFs that were issued over the past week now with Deborah Fuhr. Deborah, welcome to the show, again.

Deborah Fuhr Thank you.

Dan Barnes So we’ve seen Korea go great guns in terms of both issuance over the last week and also with some Korean firms issuing outside of Korea. Can you tell us what’s happening in that market?

Deborah Fuhr So we saw eight new listings last week. I think that the regulator historically has wanted to move away from having investors use just leveraged and inverse products. And we saw that there were four new products coming out on the Hang Seng TECH Index. So that’s an index that we’ve been seeing a number of products come out over the past couple of weeks. You also saw the Korean asset manager, Mirae, which owns a number of different brands, have their global EX brand launch their first ETFs in Europe; two thematics on video games and on digital telemedia health care. And I think this is representative of the trend that we see; many investors around the world want to buy UCITS ETFs. They will buy US-listed ETFs as sleeves that are more tactical, but I think many firms want to have a platform to do UCITS ETFs to have that global distribution capability.

Dan Barnes What other themes have we seen over the past week?

Deborah Fuhr Well, we’ve seen a gold product come to market, a couple of ESG, some bond products, so kind of playing on the same themes that we’ve seen over the year. Two products came to market in London, one on NASDAQ, one in India, one in Tel Aviv, and we haven’t seen a product come to market there in a while, and two in China. So I think the locations of listings, except for Tel Aviv, and the types of products coming to market have been pretty similar across the year. ESG, thematics bond products would also be popular, and gold.

Dan Barnes And so looking at the past year, how are we doing in terms of market valuation and inflows, outflows overall?

Deborah Fuhr Yeah, so it’s looking like we’re going to be close to eight billion US dollars at the end of the year, barring anything unforeseen happening in the next couple weeks. And flows will be close to 700 billion, which will be an all time record. So we really have seen that the market moving up has helped, but also that investors are really preferring index based ETFs. We have seen a bit of flows into active, but it’s primarily been into index equity, fixed income and a bit into gold. So I think that investors really see that ETFs are a tool to help them do their jobs, and I think that trend will continue through 2021.

Dan Barnes Very good, and you’ve said if nothing unforeseen happens over the next two weeks, of course we do have a lot of news at the moment which could potentially shake the markets up. If there were to be any disruption around Brexit, obviously, we’ve had new challenges around COVID-19 in the UK, particularly. What sort of effect might that potentially have on markets do you think?

Deborah Fuhr I think Brexit is one that probably has more impact for those of us sitting here in the UK and Europe, but in the rest of the world probably it doesn’t mean all that much, actually, and many people aren’t paying attention to it. I think the vaccine situation and this new Kent virus probably has more impact, and especially here in the UK, where they’re talking about not allowing lorries to come in for the next 48 hours from many ports. So I think people are wondering how quickly vaccines will be rolled out and how long some of the countries will be in lockdown across Europe going forward.

Dan Barnes Thanks very much, Deborah. I think this would be the last show for the year, so a merry Christmas and happy holidays to everybody. And we’ll see you in 2021!

Deborah Fuhr Great, happy holidays.

Published on December 21, 2020