Twelve new ETFs were listed on London Stock Exchange in August 2017, bringing the number of new listings year-to-date (YTD) to 89. The total number of ETFs and ETPs listed on the exchange as of the end of August is 923 and 451 respectively.
ETF issuers bringing new funds to market in London during August included First Trust, BlackRock, Deutsche Asset Management, Source and UBS.
First Trust launched the First Trust FactorFX UCITS ETF (FTFX), the first actively managed ETF in Europe to focus exclusively on opportunities in foreign exchange markets. The ETF holds between 20 and 30 currency pairs across developed and emerging markets and primarily seeks to earn alpha through the implementation of various carry trades – strategies that seek to capitalise on the interest rate differential between various currencies. FTFX has a total expense ratio (TER) of 0.75%.
BlackRock brought two fixed income ETFs to London during August. The iShares Global Corp Bond ETF USD Hedged (CRPU) tracks an index of investment grade bonds issued by corporates domiciled in both developed and emerging market countries. CRPU hedges currency exposure relative to the US dollar. Its TER is 0.25%.
BlackRock’s second launch was the iShares $ Floating Rate Bond ETF EUR Hedged (FLOE) which provides exposure to US dollar-denominated floating rate bonds issued globally while hedging currency exposure between the US dollar and the ETF’s trading currency, the euro. The fund’s TER is just 0.12%.
Deutsche Asset Management launched the db X-trackers MSCI World Index UCITS ETF GBP-hedged (XDWG), providing sterling-hedged exposure to large- and mid-cap equities across 23 developed markets. Its TER of 0.29% is the lowest fee of any MSCI World GBP-hedged ETF in the market.
Source listed the Source MSCI Europe Ex-UK UCITS ETF (MXUK), tracking the equity market performance across 14 European developed countries excluding the UK. MXUK trades in pounds sterling and has a TER of 0.20%.
UBS were however the most active issuer by number of new listings during August, bringing seven equity ETFs to London. The UBS MSCI USA Hedged GBP ETF, UBS MSCI EMU Hedged GBP ETF and UBS MSCI Japan Hedged GBP ETF were listed in accumulating and distributing share classes. They provide sterling-hedged exposures to US, eurozone and Japanese equities, with TERs of 0.24%, 0.28% and 0.45%, respectively.
Additionally, the UBS ETF Bloomberg Barclays US Liquid Corporate Interest Rate Hedged UCITS ETF represents the performance of US liquid corporate debt, whilst hedging against underlying interest rate risk. Its TER is 0.23%.
Total on-exchange value traded for ETFs and other ETPs in August 2017 was £24.2 billion, up by 1% compared to August 2016. Total on-exchange value traded for ETFs and other ETPs YTD was £212.3bn, up by 3% compared to 2016.
Reacting to North Korea’s missile launch, ETF/ETP turnover hiked to £652 million on 29 August 2017, making it the third largest day for ETF/ETP trading on the exchange so far this year. The highest trading day so far this year on exchange for ETFs/ETPs was actually 11 August when political instability pushed turnover to £732m.