Activity on the Tradeweb’s European ETF marketplace showed no signs of slowing down in June, as notional volume surpassed €23 billion for the second time on record. Adriano Pace, head of equities (Europe) at Tradeweb, said, “Institutional trading of ETFs continues to grow on Tradeweb, as demonstrated by the 101% increase in European ETF average daily volumes year-over-year.”
US-based ClearShares has launched its second ETF – the ClearShares Ultra-Short Maturity ETF (OPER US) – an actively managed fund investing in repurchase agreements (repos) backed by high quality fixed income collateral.
By PIMCO’s Nicola Mai, portfolio manager, sovereign credit analyst and Andrew Bosomworth, head of portfolio management, Germany.
Over the next few years, financial markets could be set for a series of “Rude Awakenings”. The global economy is transitioning out of a post-crisis period characterized by remarkable stability, and the changes ahead could be jarring for investors. In Europe, this forecast appears to be unfolding already.
By Mike Amey, Head of Sterling Portfolio Management & ESG Strategies, PIMCO and Gavin Power, Chief of Sustainable Development and International Affairs, PIMCO. A quiet but profound pivot is underway in the sustainable investing space – a pivot that, in our view, will reshape markets and elevate fixed income to a place of prominence within the environmental, social and governance (ESG) field.
Franklin Templeton is set to launch two actively managed fixed income ETFs in Europe. The funds, which will initially list on the Deutsche Börse and LSE, are the Franklin Liberty Euro Short Maturity UCITS ETF and the Franklin Liberty USD Investment Grade Corporate Bond UCITS ETF. David Zahn, head of European fixed income at Franklin Templeton Investments, said, “As active managers, we have the flexibility to pursue investment opportunities that are beyond the fund’s benchmark index to help identify the most attractive securities to invest in.”
Trading activity on Tradeweb’s European-listed ETF marketplace remained solid in April with total traded volume at €16.7 billion. Europe Equities emerged as the month’s most heavily-traded ETF category. Adriano Pace, managing director for equity derivatives at Tradeweb, said: “April saw the return of the equity ETF buyer, reversing the sell-off that took hold of the market in the two preceding months.”
ETFs providing exposure to high-yield corporate bonds enjoyed strong returns in April, bouncing back from weak performance in the first quarter of 2018. BlackRock’s iShares $ High Yield Corp Bond UCITS ETF (SHYU LN)—the largest of its kind listed in Europe with over $3.8 billion in assets under management—was among the top high-yield performers for the month, with a return of 2.5%.
By Nicola Mai, portfolio manager, sovereign credit analyst at PIMCO.
Back in 2014, PIMCO developed the concept of The New Neutral as a secular framework for interest rates. After the financial crisis, the global economy entered a new regime in which the equilibrium (i.e., neutral or natural) policy rates needed to ensure trend growth and at-target inflation would be much lower than their historical levels.
Prudential Global Investment Management (PGIM) has brought its first ETF to market with the launch of the PGIM Ultra Short Bond ETF (PULS US) on NYSE Arca. PULS is an actively managed fund which provides exposure to a diversified portfolio of ultra-short fixed income securities. Stuart Parker, president and CEO of PGIM Investments. “The actively managed ETF market, while small, has seen steady growth. Entering this market is a natural next step to expand our product range.”
Actively managed ETFs and ETPs listed globally gathered $3.1 billion in net inflows during January 2018, the second largest monthly net inflow ever, according to ETF industry consultants ETFGI.