May ETP launch review

United States becomes the main focus of issuers in May

This report aggregates newly launched funds in May and highlights the performance of the funds launched in April.

• 27 funds were launched in May, equalling the number of funds launched in April.
• 16 funds were launched in the Americas, 5 in Europe and 6 were launched in the APAC region.
• 18 funds focused on developed markets, 6 on emerging markets, 2 on frontier markets and just one fund focused on blended markets.

May New Listings

The month of May saw 10 funds with a geographic focus on the United States. This is a large increase in US focused funds, after April only added two. In addition to a renewed US focus, issuers also added seven new fixed income ETFs. iShares was responsible for four of these ETFs, including two that are interest rate hedged.

The APAC region gained six new funds, a stark contrast over April figures. China Universal Hong Kong, Arirang Korea, and Simplex Japan all added to their portfolios with funds focused on emerging markets, developed markets outside the US, consumer staples and healthcare.

While actively managed funds are starting to gather buzz in the media, they are still lagging behind indexed funds. First Trust Managed Municipal ETF was the sole actively managed fund launched in May. Several issuers are searching for SEC approval on alternative treatment of actively managed funds and if granted, we expect to see a large rise in actively managed funds in the next year.

April Flows

Of the ETPs listed in April, investors favoured funds with a ‘size and style’ investment approach. $76.7m in inflows went to funds focusing on Broad Market, Large Cap and Mid Cap equities. This group includes Deka MDAX (R) UCITS ETF, which recorded inflows of $38.2m since inception.

Purpose Best Ideas Fund ETF gained $6.4m following a positive trend of alternative ETFs that track selections of investments from top investors around the world.

Large cap ETFs gained $6.5m since April. ETF Securities launched 3X leveraged funds, both long and short, that tracked the FTSE 100 and the EURO STOXX 50. Inflows only went to the shorted versions of the funds, giving insight into negative investor sentiment towards European large cap equities.

James Hohorst, Associate, IHS Markit