Midsummer celebrations

As we get to the end of June and the first half of 2024, we know that assets are running well in the ETF industry. But we also have strong figures from the European Fund and Asset Management Association, EFAMA, that reports that 2023 was a record-breaking year for ETFs.

EFAMA writes that UCITS ETFs attracted EUR169 billion in net sales in 2023. Non-ETF long-term UCITS on the other hand, saw net outflows of EUR155 billion throughout 2023. The association also said that passive UCITS continued to gain market share, writing that the market share of passive UCITS rose from 11 per cent in 2013 to 26 per cent at end 2023. This trend can be attributed to a combination of lower costs for passive funds and increasing investor demand for ETFs, the association says.

One of the biggest growth areas in ETPs globally has been in product based on digital assets. Matteo Greco from Fineqia International wrote in his note this week that VanEck has now received approval to launch a BTC Spot ETF on the Australian Securities Exchange, the second such product to arrive in Australia.

Ethereum ETFs are due to be launched in the US in early July and Greco writes: "The launch of ETH Spot ETFs may pave the way for issuers to file for several other digital asset ETFs. Recently, rumours have been circulating about BlackRock soon filing for a Solana ETF. This suggests that the approval of ETH Spot ETFs could facilitate the filing and approval of other major digital assets that use Proof-of-Stake (PoS) as their consensus mechanism."

Fiona Nicolson talked to Matt Barry of Touchstone Investments this week, a firm that is growing its presence in the ETF space in the US. Barry says: "Our first ETFs were mainly focused on domestic equities and fixed income. I think we’ll see more products later this year, especially in the international-equity space," he comments.

Reflecting on the firm’s reasons for offering ETFs, Barry says: "Most of our clients like the cost-efficiency, the tax efficiency and the liquidity that ETFs provide."

Touchstone also recently filed an application with the SEC to allow its mutual funds to offer ETF share classes alongside their mutual-fund share classes: "We’re excited about the filing and its potential. We think it could benefit shareholders significantly," Barry comments.

I am attending IMPower’s Fund Forum event in Monte Carlo this week, chairing and speaking a few ETF sessions. Those of you at the event are invited to come and find me!

Beverly Chandler, Managing Editor

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