ETF TV News November 16th: Update on new ETFs

Dan Barnes Welcome to EFT TV News, I’m Dan Barnes. Today, we’ll be talking about the new issues in the ETF space over the past week. Joining me is Deborah Fuhr of ETFGI. Deborah, welcome to the show.

Deborah Fuhr Thank you.

Dan Barnes So in terms of the geography where we’ve seen ETFs launch, whereabouts have they been concentrated?

Deborah Fuhr Yeah, so if we look at last week, we saw 20 new products come to market and list, 10 were in Asia Pacific, eight were in the US, and two were in Europe.

Dan Barnes Is 20 a particularly high number for this sort of time of year?

Deborah Fuhr No, I think we often see that towards the end of the year there’s products coming to market. We tend to see it drop off around Christmas time, because people really want to avoid the holiday season. So I expect we’ll see more launches for the next few weeks and then probably a tapering off.

Dan Barnes Looking at the largest new issues, are there any particular trends or things we’re seeing within that?

Deborah Fuhr Yeah, so I think a continuation of the theme of disruptive technology, we have seven products in that category. We have six in the sustainable or ESG category, two of which would be thematic and one is fixed income. So normally we’ve seen them mostly equity, one high yield and two dividend, so looking for income, one on banking and one on China 500.

Dan Barnes If we look at the size of the exchange-traded funds which have been issued, based upon seed capital, which are the largest and which themes do they represent?

Deborah Fuhr So that’s a good question. I mean, normally ETFs will come to market with minimal seed capital. Some of the larger ones that came out last week would be; JP Morgan has a carbon transition, global equity ETF that was launched. And the goal there is to invest in large and mid-sized companies from industrial nations around the world, which seek to reduce carbon dioxide emissions, in essence, adhering to the Paris Climate Agreement benchmark, and promoting sustainable, economic systems. Another one that came out with significant seed capital would be from State Street. So the SPDR Bloomberg SASB Corporate Bond ESG Select ETF; it’s an income ESG aware exposure, providing access to US dollar-denominated, investment grade, corporate bonds. iShares has also done an ESG US dollar-denominated, high yield in other income generating corporate bonds, maturing in 2026. And Goldman Sachs has done an innovative ETF with significant seed capital. Not surprising because these are larger firms with global footprints and the distribution capability.

Dan Barnes That’s very interesting. Thanks very much, Deborah.

Deborah Fuhr Thank you.

Published on November 17, 2020