BNP Paribas has listed eight new exchange-traded commodities (ETCs) on Deutsche Börse's Xetra segment. The new ETCs expand BNP Paribas' product range by giving investors access to the performance of futures contracts from the metals and energy sectors via US dollar-denominated trackers. The reference indices from the Rogers International Commodity Enhanced index (RICI) family track the futures contracts with differing maturities in the following commodities: gasoline (petrol), precious and industrial metals, energy, natural gas, gas oil, heating oil and WTI oil. The limited term of the futures contracts requires a switch prior to expiry in exchange for a futures contract with the next expiry date (rollover). Possible rollover losses are minimised through an optimised procedure for selecting futures contracts.
Deutsche Börse's product range in its ETF and ETP segment currently comprises 1,147 ETFs, 232 ETCs and 132 ETNs. This selection, together with an average monthly trading volume of around €13bn ($14.3m), makes Xetra Europe's leading trading venue.
SC Malaysia-led ETF task force moves to spur innovation and drive industry growth
A task force on exchange-traded funds (ETFs) led by the Malaysian regulator has released a set of key recommendations aimed at attracting greater investor participation and incentivising issuances by ETF managers in the Malaysian market. The objective of the task force - chaired by Securities Commission Malaysia (SC) and comprising Bursa Malaysia, fund managers, market makers and institutional investors - is to spur sustained development and competitiveness of the Malaysian ETF market, capitalising on the strong growth trend and potential of the global ETF industry.
Among the recommendations include facilitating issuances and investments, enabling product innovation and intensifying investor engagements. To attract more issuers and encourage the issuance of ETFs, the task force recommends the lowering of the minimum capital requirement for ETF issuers from MYR10m ($2.3m) to MYR2m. Other measures include removal of the requirement for submissions to be made by principal advisors, and reduction in the time to market in the issuance process.
The task force also recommends the broadening of the ETF distribution channels by permitting financial institutions, online platforms and financial planners to offer ETFs to clients via stockbroking companies. The use of such alternative distribution channels will provide investors greater access to a more diverse range of products at a lower entry cost.
In encouraging product innovation, the introduction of new types of ETFs, including futures-based and conventional commodity-based ETFs will be facilitated. This will provide affordable entry points for retailers in traditionally difficult-to-access investments. The task force also recommends allowing greater flexibility in terms of investment strategies including the introduction of Leveraged and Inverse ETFs.
Norway's Nordnet launches new ETP initiative
Nordnet is listing its first exchange-traded products (ETPs) on Oslo Børs in an initiative comprising both ETNs and Mini Futures. Mini futures are an entirely new product on Oslo Børs. Nordnet's new ETNs and mini futures can be traded without paying brokerage fees.
There are currently 298 ETNs listed on Oslo Børs, and Nordnet's initiative means the choice of exchange-traded products continues to grow. Nordnet is planning to roll out new products on an ongoing basis with other indices, shares and commodities as their underlying assets. The products are being issued by Nordea.
Assets invested in ETFs and ETPs listed in Europe reach new record
Research and consultancy firm ETFGI has reported that assets invested in ETFs/ETPs listed in Europe reached a new record high of $658bn at the end April 2017 surpassing the prior record of $640bn set at the end of Q1 2017.
At the end of April 2017, the European ETF/ETP industry had 2,257 ETFs/ETPs, with 7,128 listings, assets of $658 Bn, from 60 providers listed on 27 exchanges in 21 countries. ETFs and ETPs listed in Europe gathered net inflows of $5.20bn in April marking the 32nd month of positive net new asset flows. Year to date, net inflows stand at $40.5bn compared to $14.9bn, registered at this point last year. Equity ETFs/ETPs saw net inflows of $2.97bn in April, bringing year to date net inflows to $24.20bn, which is greater than the net outflows of $4.79bn over the same period last year.
Fixed income ETFs and ETPs experienced net inflows of $1.04bn in April, growing year to date net inflows to $8.86bn, which is less than the same period last year which saw net inflows of $13.38bn. Commodity ETFs/ETPs accumulated net inflows of $450m in April. Year to date, net inflows are at $5.17bn, compared to net inflows of $5.33bn over the same period last year.
Amundi ETF gathered the largest net ETF/ETP inflows in April with $1.82bn, followed by UBS ETFs with $1.24bn and Lyxor AM with $910m net inflows. YTD, iShares gathered the largest net ETF/ETP inflows YTD with $10.04gn, followed by Lyxor AM with $5.51bn and Amundi ETF with $5.44bn net inflows.
BlackRock launches pair of Dollar bond ETFs for European range
BlackRock has launched two new fixed income ETFs with the aim of providing investors greater granularity in US bond exposures.
iShares $ Intermediate Credit Bond UCITS ETF (ICBU) invests in a subset of US investment grade bonds, with maturity dates between one and 10-years. The fund provides exposure to a broad array of investment grade corporate, sovereign, supranational, local authority and non-US agency bonds. The fund offers income generation potential relative to US treasuries with similar maturities.
iShares $ TIPS 0-5 UCITS ETF (TIP5) invests in short-term Treasury Inflation-Protected Securities and aims to provide an inflation hedge with lower interest rate risk, while offering growth potential. The bonds included in the underlying index have a duration ranging between zero and five years and are US dollar denominated.
The global bond ETF industry achieved its best quarter on record with $44.5bn inflows in Q1 2017, according to BlackRock which now offers 86 bond ETFs in Europe, with a variety of exposures across duration and risk levels.
China Southern debuts tracker fund linked to HSCEI Smart Index
Hang Seng Indexes Company Limited ("Hang Seng Indexes") has licensed the Hang Seng China Enterprises Smart Index to China Southern Asset Management Company Limited to serve as the underlying index for the creation of a listed open-ended fund (LOF) which is available for trading on the Shenzhen Stock Exchange today.
The 'Smart' share class switching mechanism was initiated by Hang Seng Indexes in 2013 with the introduction of the Hang Seng China AH Smart Index. The index provides an investment strategy for investing in companies with dual listings of A-shares and H-shares (AH Companies) and enhances the portfolio return through switching between share classes based on the relative prices of the share classes. The 'Smart' concept has since been applied to the Hang Seng China Enterprises Index with the launch of the HSCEI Smart in 2015, which takes advantage of the high proportion of AH Companies in the HSCEI.
The new LOF will bring the number of exchange-traded products linked to indexes in the
Hang Seng Family of Indexes to 65 - with listings on 17 different stock exchanges across the world. As at March 31, 2017, assets under management in exchange-traded products linked to indexes in the Hang Seng Family of Indexes had reached a total of more than US$28 billion.
Bats adds new issuer to the Bats ETF Marketplace
CBOE's Bats has added Principal as a new issuer to the Bats exchange-traded fund (ETF) Marketplace. Principal has listed the Principal Active Global Dividend Income ETF, an actively managed tracker that seeks to achieve its investment objective by investing in common stocks and real estate investment trusts.
The fund invests in securities of issuers located throughout the world, including US and foreign companies in foreign and emerging market securities, and in growth and value stocks. The fund typically holds investments tied economically to at least three countries outside of the US.
This is the latest addition to Principal's actively managed range of ETFs which also comprises the Principal EDGE Active Income ETF. The US-based ETF provider also has a range of 'strategic beta' fund trackers including the Principal Millennials Index ETF, Principal U.S. Small Cap Index ETF, Principal Healthcare Innovators Index ETF, Principal Shareholder Yield Index ETF and Principal Price Setters Index ETF.
Year-to-date, Bats has listed 36 ETFs. In the first quarter of 2017, Bats accepted for trading a total of 23 ETFs from eight issuers to the Bats ETF Marketplace, and year to date, has won 39% of all new US ETF listings. There are now 171 ETFs listed on Bats ETF Marketplace, from 33 different issuers.
Sberbank places second issue of structured exchange-traded bonds
Sberbank's second issue of structured exchange-traded bonds was closed on April 28, and are available for trading on the Micex exchange. According to the Russian bank, demand totalled RUB222.2m. The new bonds (OGZD_DIGIPRT-24m-001Р-02R series issue) has a maturity of 728 days, the fixed coupon payment is made every 182 days. The security has a fixed coupon rate of 0.01%, return of face value upon redemption, and potential additional yield of up to 25.32% in US dollars in case of favourable performance of the underlying asset. The underlying asset is American depositary receipts representing Gazprom shares.
This is the second issue of the product. Sberbank placed the debut issue of structured exchange-traded bonds worth 456m roubles on December 16, 2016. The new issue is intended for a wide range of investors, from individuals to various types of institutional investors. According to Sberbank, more than 170 clients participated in the placement. Settlements related to the placement were conducted on the Micex exchange on April 28. The funds that were raised will be used for general corporate purposes. Sberbank CIB acted as the placement organiser.
Sberbank will continue to place structured bonds this year, and is considering to launch further issues in other currencies, although currently the bank is seeing the biggest interest in rouble-denominated instruments, said Andrey Shemetov, head of Sberbank CIB's Global Markets.
This second issue makes part of Sberbank's structured exchange-traded bond programme which has a total face value of 200bn roubles. Sberbank plans to offer investors products linked to a wide range of market indicators (shares, goods, interest rates, etc.) in 2017. Specific indicators will be chosen taking into account clients' interests and the market environment, said Shementov.