Latest: Luma signs first Swiss client

Finanzlab, a Swiss firm specialising in the design, selection and brokerage of custom structured products, will use the platform’s technology to better serve the needs of its clients, which include wealth managers and private banks, across the market in Switzerland, according to David Wood, managing director of Luma’s International Business.

Finanzlab’s addition to the platform comes as Luma moves to expand its reach in Europe as part of its international growth strategy.

‘Independence is of utmost importance to our customers,’ said Vincent Bonnard (pictured), COO at Finanzlab. ‘For the first time ever, this will allow customers to freely choose their providers while keeping the same platform.’

BBVA deploys ESG credit tranches, adds to QIS range

BBVA has launched the iTraxx MSCI ESG Tranches, a credit-linked note (CLN) linked to the iTraxx MSCI ESG Screened Europe index, a CDS sustainability index derived from the iTraxx Europe S35 which is powered by Markit and uses ESG ratings provided by MSCI.

The new credit tranche offers protection against initial credit events and offers yield enhancement while helping to diversify your ESG credit risk exposure, according to the Spanish bank.

The product is protected against the first two credit events on the iTraxx MSCI ESG Screened Europe S35 as well as any credit event occurring to companies in the iTraxx Europe S35 and were excluded in the ESG Screening process.

‘The lower credit spread of the iTraxx MSCI ESG Screened Europe S35 suggests that the market perceives the filtered credit references as having, on average, higher default risk than the 90 constituents of the ESG index,’ stated the bank. ‘This dual defensive nature makes comparability even more difficult, but also acts as an excellent way to manage credit risk, when investing in European investment grade (IG) credit.’

The news follows the expansion of its Quantitative Investment Strategies range with the launch of the Solactive BBVA Health & Wellness index, which tracks global companies leading the innovation in human healthcare and personal wellbeing products and services including Colgate-Palmolive, Johnson & Johnson, Novartis, Procter & Gamble, Roche, and Merck & Co.

Leverage Shares dispatches iStoxx single-stock leveraged indices

Leverage Shares, the UK-based provider of physically-backed single stock ETPs, has expanded its suite of short and leveraged (S&L) trackers with the first ever leveraged ETPs offering 3x geared and -1x inverse exposure to new single stocks such as Airbnb, Disney, Palantir, Peloton as well as a -3x inverse version of the firm’s flagship Tesla ETPs.

The launch of these physically backed ETPs offer investors access to additional sectors like streaming services, personal health, leisure, and analytics via the iStoxx Single-Stock Leveraged Indices - the indices track inverse (-1x to -2x) and leveraged (2x to 3x) investments in 14 stocks and American Depositary Receipts (ADRs) of widely traded companies, including Tesla, PayPal, Square and HSBC. Leverage Shares has listed respective ETPs tracking the indices on the London Stock Exchange.

‘Experienced investors can express strong convictions though our 3x ETPs or minimize downside risk by hedging with our inverse products,’ said Oktay Kavrak, product strategy, Leverage Shares.

Apart from adding 3x variants of existing ETPs, the firm has also added new stocks on which it now offers exchange-traded products.

Global L&I ETPs reach record US$106.7bn

Assets invested in leveraged and inverse (L&I) ETPs, including ETFs, listed globally reached a record US$106.7 billion at the end of May, according to ETFGI.

Total assets invested in leveraged and inverse ETPs increased from US$102.4 billion at the end of April to US$106.7 billion. Leveraged and Inverse ETFs and ETPs suffered net outflows of US$4.14 billion during May.

The global leveraged and inverse ETP industry had 864 products at the end of May. The majority of assets - US$78.21 billion - were invested in leveraged ETFs and ETPs, followed by US$16.05 billion invested in leveraged inverse products and US$12.38 billion invested in inverse products.

The largest market for leveraged and inverse ETPs was the United States, which, at the end of May 2021, had assets of US$71 billion invested in 210 ETFs/ETPs.

The top 20 leveraged and inverse ETFs and ETPs collectively gathered US$9.86 billion in net new assets year-to-date to May 2021. The Direxion Daily Semiconductors Bull 3x Shares (SOXL US) gathered US$2.01 billion alone, the largest net inflow year-to-date to May.

Bloomberg rolls out EM ESG fixed income series

Bloomberg and MSCI have launched the Bloomberg Barclays MSCI Emerging Markets ESG Index Suite which includes 10 Environmental, Social and Governance (ESG) indices.

These benchmarks incorporate ESG and SRI considerations in underlying hard and local currency emerging market fixed income indices with different versions across global, Pan-Euro and USD.

The index family includes the Bloomberg Barclays MSCI EM ESG Weighted Indices which use MSCI ESG ratings to tilt issuer market weights; Bloomberg Barclays MSCI EM SRI Indices which are designed to screen out issuers with substantial revenue derived from sources such as adult entertainment, alcohol, gambling, tobacco, controversial military weapons, civilian firearms, nuclear power, and genetically modified organisms (GMOs); and Bloomberg Barclays MSCI EM Sustainability Indices which uses emerging markets debt benchmark that includes fixed and floating-rate USD, EUR and/or GBP-denominated debt issued from sovereign, quasi-sovereign, and corporate EM issuers.

The launch follows the announcement by Eurex that on 27 September it will introduce futures on the Bloomberg Barclays MSCI Euro Green Bond SRI and Euro Corporate SRI indexes. The new derivatives are aimed at increasing liquidity and cash management, portfolio overlay strategies and hedging opportunities.

The ESG fixed income landscape currently comprises around US$53 trillion in outstanding bonds globally and has grown by over US$10 trillion in 2020, according to Eurex.