Like bees to honey

The stories are pouring in about September’s record-breaking month for ETF asset inflows, with BlackRock reporting USD234.4 billion was added to global ETPs in September – the highest inflow month on record, with a strong showing from equity (USD153.4 billion), fixed income (USD50.9 billion) and commodity (USD19.3 billion) ETPs.

The firm’s iShares franchise is a significant beneficiary of the inflows. A standout fact is that the iShares’ USD1.2 trillion bond ETF platform would make iShares a top five bond manager on a standalone basis.

BlackRock also reported that the USD34.9 billion added to EMEA-listed equity ETPs in August was the highest on record, signalling a risk-on month for EMEA investors.

Europe is undoubtedly enjoying a record year, with Invesco writing that September saw record-breaking inflows into European ETFs, with USD46.8 billion of net new assets, pushing EMEA ETF AUM above USD3 trillion for the first time. Assets have moved into precious metals and bitcoin, the firm says.

Our interview this week gives us some context of the European growth as we spoke with American Century’s Avantis, with Avantis Investors’ Chief Investment Strategist Phil McInnis and Head of EMEA Richard Adams explaining their arrival and growth in Europe. There were three UCITS ETFs launched in the UK last year as the firm expanded overseas, with products that have raised USD1 billion in that year.

And that is with listings in the UK and Germany only as caution has kept them focused on just two jurisdictions. "We tend to try to be judicious. Rather than registering everywhere, we like to see that demand expressed first, so the UK and Germany were the two largest ETF opportunity sets and where we had distribution," McInnis says.

"We have been at active ETF-focused events and have been surprised by the openness of allocators. We cleared USD1 billion in nine months after listing those three ETFs and are just getting started now. We expect growth to pick up and activity beyond Germany and the UK."

The UK’s platforms, used by many advisers, remain a problem, Adams says.

"Some are quite efficient but it’s a mixed bag and I do see that changing with platforms planning to modernise their ETF trading opportunities and being more innovative in how they provide access to ETFs. We are encouraged by the number of asset managers bringing ETFs to the market and the increase in education.

"We are optimistic in the UK and believe the changes will help with the adoption of ETFs in the advisory market."

Another country enjoying significant growth in ETF take-up is Australia with the Australian Securities Exchange (ASX) reporting that they have just seen their 400th ETF with the listing of the Global X S&P Australia GARP ETF (ASX:GRPA).

The size of the market now exceeds AUD300 billion in funds under management. Over the past five years, FUM has more than quadrupled, rising from AUD71 billion in 2020.

And in late news, as we are going to press, we are pleased to tell you that WisdomTree has gained the first approval of a crypto ETP launch in the UK. Read more here.

Beverly Chandler, Managing Editor

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