Turbulent week for world markets

Markets have kept many of you very busy indeed this week with Bloomberg Intelligence describing the collapse of SVB as the ‘next Russia’ estimating that USD6.5 billion has been wiped off passive funds. At the time of writing, we have the news that the Swiss central bank is to lend Credit Suisse USD54 billion, providing a liquidity backstop after its shares dropped 30 per cent, sparking a sell-off in bank shares across Europe and the US.

Contagion was the fear, particularly for those who have lived through previous market crashes, but at the time of writing, the markets seem to have rebounded on the back of the Swiss central bank support.

Moderate was the key word in BlackRock’s report of global ETF flows in February with both equity and fixed income ETFs seeing reduced buying. Outflows from US equity ETPs (-USD5.5 billion) continued across listing regions for a second consecutive month – the first time this has happened since February-March 2018, BlackRock reported.

Meanwhile, we spoke with AllianceBernstein’s Noel Archard on their planned new active ETF launches in the US and their first conversion of a mutual fund to an ETF. The firm’s commitment to active ETFs is supported by the figures that show that last year, active ETFs represented just 4 per cent of ETF assets and 14 per cent in flows, while in January this year, they were up to 20 per cent of flows. "ETF investors are embracing the fact that they have a new set of tools," Archard says.

New tools and a new geographical area for ETF growth came this week in India, which has seen two ETF launches – one more of a rename from India’s First US Debt (ETF) Fund to Bandhan US Treasury Bond 0-1 Year Fund of Fund. We have an interview with Bandhan coming next week, detailing the firm and the growth in appetite for ETFs in India. The second launch was from Mirae Asset Mutual Fund in India with the Mirae Asset Nifty 100 Low Volatility 30 ETF, described as a Smart Beta ETF that aims to measure the performance of the low volatile securities in the large market capitalisation segment.

Our news this week was the launch of our first podcast, Off the Record, in partnership with Truss Edge. The podcast features me in discussion with two famous ETF analysts, Detlef Glow of Refinitiv Lipper and Athanasios Psarofagis of Bloomberg Intelligence, discussing the extraordinary growth of European ETFs, often in the face of challenges such as retrocession or the fragmented market, and the outlook for ESG and active funds. Glow describes ETFs as the salt and pepper in the asset management soup and we all know that good seasoning is essential to produce a good dish.

Listen to Off the Record here

ETF Express is collaborating with IMpower FundForum, Europe’s largest asset and wealth management event, on its ETF sessions this summer in Monte Carlo.

To view the current agenda please click here. 

Delegates can receive a 10 per cent discount using this code FKN3253EMSPK, following this link and asset managers can receive a further 50 per cent discount.

Beverly Chandler, Managing Editor

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