Vontobel has increased the issue size of its two-year Voncert on Bitcoin (CH0327606114) tracker to 15,000 in Switzerland, and to 70,000 in Germany (55,000 originally) in a move to respond to "strong demand". This corresponds to an investment volume of around CHF18m and €7.8m respectively. The performance of the tracker certificate stood at +75% in Switzerland and 59% in Germany as of April 3, 2017.
In offering this investment opportunity in bitcoin, Vontobel is expanding further into the digital world, bringing investment expertise and fintech ever closer together, according to Roger Studer, head of Vontobel investment banking. 'With our bitcoin certificates, we are giving investors the exclusive possibility of investing in this digital currency on the Swiss and German exchanges, investments they can then book to their custody accounts,' said Studer in a statement.
In 2016, Vontobel became the first provider to offer Swiss and German investors tracker certificates on bitcoin. Voncert on Bitcoin can be traded at the current bid/ask prices on the Swiss Exchange and on the exchanges in Frankfurt and Stuttgart respectively. According to Studer, investors participate in the bitcoin price trend, without having to have access to a bitcoin platform, and therefore do not bear the risk of a loss of bitcoins as a result of hacker attacks, technical problems, improper handling, or the failure of a bitcoin custodian. The final fixing will be on July 16, 2018.
Investors have been returning to gold 'aggressively' this year, according to Source, one of Europe's largest ETF providers, which has seen more than half a billion dollars of inflows to its Source Physical Gold ETC since the start of 2017, and over US$2bn since the start of last year. Chris Mellor, executive director, product management at Source ETF, said that while the risk-on move in markets in November and December coincided with Gold outflows, 'investors have come back in aggressively in 2017'.
Source expects gold flows to continue as geopolitical risks continue to worry politicians and investors alike. 'Last year's key drivers were market volatility, the shock of the Brexit vote and the uncertainty in the run-up to the US presidential election,' said Mellor. 'This year we see increased political uncertainty in France and Italy and an election in Germany in September. At the same time, the US recovery doesn't look as solid as it did, US equity valuations are getting extended and geopolitical risks, including North Korea, China, Russia and protectionism to name a few, are on the rise.'
Source also pointed that European investors have continued to increase their commodity exposure, with US$1.3bn going into broad commodity ETFs in the first quarter of 2017, which is quickly approaching the US$1.8bn invested in the whole of 2016. The vast majority of this year's broad commodity flows have been into ETFs tracking the Bloomberg Commodity Index, with the Source Bloomberg Commodity UCITS ETF raising over US$1bn since its launch in January 2017, becoming the most successful ETF launch in the past five years. Mellor said that investors wanting to diversify their portfolios are turning to commodities. 'That makes sense given the low correlation commodities have with equities and bonds, and especially now that some equity valuations may look stretched,' said Mellor.
Nasdaq has announced the listing of seven new ETP launches. This includes Active Alts' Contrarian ETF an actively managed fund that invests in companies with large short positions that are subject to a short squeeze; First Trust' TCW Opportunistic Fixed Income ETF, an actively managed fund that invests in fixed income securities; Gabelli Funds' Food of All Nations NextShares, a product that invests in US domestic and foreign companies in the food and beverage industries; and ALPS' Dorsey Wright Sector Momentum ETF, a fund designed to capture momentum investing at both the sector and stock level, that tracks an index owned and developed by Dorsey, Wright & Associates, a Nasdaq Company. In addition, Davis Advisors launched three actively-managed funds using a fundamental bottom up approach including the Davis Select U.S. Equity ETF, Davis Select Financial ETF and Davis Select Worldwide ETF
Bats, a CBOE Holdings company, has added a new iShares iBond tracker fund to the Bats ETF Marketplace. The iShares iBonds Dec 2023 Term Muni Bond ETF seeks to track the investment results of an index composed of investment-grade US municipal bonds maturing after December 31, 2022 and before December 2, 2023. Each bond included in the Underlying Index must have a rating of at least BBB- by S&P Global Ratings, Baa3 by Moody's Investors Service, Inc. ("Moody's"), or BBB- by Fitch Ratings. The fund is the 41st iShares product to list on Bats. Year-to-date, Bats has listed 28 ETFs to its US market.
In the first quarter of 2017, Bats added a total of 23 ETFs from eight issuers to the Bats ETF Marketplace, and won 33% of all new US ETF listings. There are now 163 ETFs listed on Bats ETF Marketplace, from 30 different issuers.
JP Morgan Asset Management has launched the JPMorgan Global Bond Opportunities ETF, an actively managed ETF built off the success of the JPMorgan Global Bond Opportunities Fund. The strategy takes a 'benchmark agnostic approach' and seeks to take advantage of opportunities across market sectors, credit quality, countries and currencies, extending beyond traditional fixed income investments. The fund is managed by an investment team led by global CIO and portfolio manager Bob Michele, who has been managing global fixed income for over 35 years. JP Morgan Asset Management's ETF suite features eleven product offerings with over US$1bn in assets under management. JP Morgan achieved a top ten position in flows across smart beta ETFs in 2016, ranking 8th out of 47 ETF managers.
SerenityShares Investments has launched the SerenityShares Impact ETF, providing access to US-listed equities whose business models seek to improve environmental and societal concerns. The SerenityShares Impact ETF currently invests in 115 US-listed securities with a focus on making a positive impact on society or the environment through its business operations. The fund tracks the Spade Impact Index, whose methodology focuses on 20 core impact themes identified and defined by SerenityShares, including environmental stewardship, access to local healthcare, renewable energy, clean water, eldercare, education, community building, and access to libraries of information. Eligible firms must be listed on either NYSE or Nasdaq and have a market capitalization of at least US$1.5bn. Constituents are weighted by market capitalization with minimum (0.5%) and maximum (3.5%) weighting thresholds utilized. There are currently 115 stocks in the index and the largest sector exposures are to industrials, technology, healthcare and consumer non-cyclicals, with each representing approximately 15-20% of the total index value.
While traditional ESG-themed ETFs focus on screening out firms operating in controversial industries (such as tobacco, weapons, and fossil fuels), the ETF represents the next generation of funds which aim to positively screen for and increase exposure to companies whose activities actively benefit society and the planet, according to Scott Sacknoff, chief investment officer, SerenityShares.
'A growing class of investors wants to have an impact fund among their suite of investment options. With the launch of our Impact ETF, a single fund can enable institutions and retail clients the ability to not only invest, but invest with a purpose in a diversified basket of US-listed companies,' said Kathleen Neumann, president of SerenityShares, in a statement.
Impact investment firm Inspire Investing has launched two passively managed ETFs designed to invest in companies aligned with biblical values - the Inspire Global Hope Large Cap ETF and Inspire Small/Mid Cap Impact ETF. The funds use a rules-based selection methodology to provide exposure to firms providing a high positive impact on society including those delivering clean water projects, human trafficking relief efforts, Bible distribution, and humanitarian relief for refugees in the Syrian crisis. Inspire Investing has pledged a portion of the fees charged on its ETFs to the Christian ministry.
The ETFs are driven by the Inspire Investing's Impact Score methodology, which filters publicly available data points related to thousands of companies globally to help investors identify companies which adhere to the Certified Biblically Responsible Investing (BRI) standards, an industry benchmark measuring alignment with biblical values. The model goes further by ranking the eligible companies according to their positive effects on customers, communities, workplaces and the world.
The Inspire Global Hope Large Cap ETF tracks the Inspire Global Hope Large Cap Equal Weight Index, a reference for the performance of 400 of the most inspiring large cap companies from around the globe. Inspire defines "large cap" as a market capitalization of $10 billion or greater. The index is rebalanced to a weighting comprised of 50% US, 40% international developed, and 10% emerging market companies on a quarterly schedule. Each firm receives an equal weighting as of the rebalance date.
The Inspire Small/Mid Cap Impact ETF tracks the Inspire Small/Mid Cap Impact Equal Weight Index, comprised of 500 of the most inspiring small and mid-cap companies listed in the US, as determined by the Inspire Impact Score. The index is comprised of 50% mid-cap (with market capitalizations between $2 billion - $3.5bn), and 50% small-cap companies (with market capitalizations between US$1bn - $2bn). Firms are also rebalanced to an equal weighting on a quarterly schedule.
To further boost the funds' social impact, Inspire Investing has pledged a portion of the fees charged on the ETFs to the Christian ministry. The ETFs are not the first to align their strategies with Christian beliefs. In April 2016, Global X launched the Global X S&P 500 Catholic Values Index ETF which invests in US large cap companies whose business practices adhere to the Socially Responsible Investment Guidelines as outlined by the United States Conference of Catholic Bishops.
The index's methodology screens out companies with revenue exposure to operations that do not meet Catholic values by analysing each firm's financial statements on a quarterly review basis. These activities include abortion, adult entertainment, biological and chemical weapons, contraception, nuclear weapons, stem cell activity, and the use of child labour. Those that survive the screening process are subsequently weighted according to their free float market capitalisation.