1) Retail Investors Reach for Core ESG ETFs
ETF.com | 11/16/2021
Because… The article points out that retail interest in ESG ETFs has cooled considerably since peaking at the beginning of the year. A comparison of YTD sales (as of September) between iShares ESG ETFs and their non-ESG counterparts shows that the leading ESG ETFs are still generating a significant amount of investor attention. For example, iShares ESG Aware MSCI USA ETF (ESGU) raised $6.2 billion in the first three quarters, accounting for 29% of its $21.6 billion assets. Meanwhile, iShares Core S&P 500 ETF, the firm’s largest ETF, collected $12.1 billion, representing just 4% of its assets. Similarly, the $6.7 billion iShares ESG Aware MSCI EAFE ETF (ESGD) brought in $2.5 billion in the first nine months, translating to 37% of its assets. By comparison, the $98.0 billion iShares Core MSCI EAFE ETF garnered $8.4 billion, equivalent to 9% of its assets. The YTD sales-to-assets ratio for iShares ESG Aware MSCI EM ETF (ESGE) was also higher than that of iShares MSCI Emerging Markets ETF, although the gap was not substantial.
2) Fidelity Investments Launches Guaranteed Income Direct to Help Workers Convert 401(k) and 403(b) Savings Into Annuities at Retirement
Fidelity | 11/18/2021
Because… Besides Fidelity’s Guaranteed Income Direct, BlackRock announced last month that five large plan sponsors, with a combined $7.5 billion of plan assets in target-date investments, had elected to implement its LifePath Paycheck solution as the default investment option in their employees’ retirement plans. Also in October, Nationwide, in partnership with American Funds, launched a new target-date fund series, which incorporates Lifetime Income Builder, a fixed indexed annuity with a guaranteed lifetime withdrawal benefit. These offerings from industry leaders indicate asset management firms are increasingly focusing on providing retirement income solutions to satisfy plan participants’ decumulation needs. A survey published by IRI (Insured Retirement Institute) in August found that 90% of workers want non-Social Security income to be guaranteed for life, and 77% would be likely to allocate to an in-plan variable annuity with a lifetime income guarantee. With more plan sponsors willing to help their employees build an income stream, we expect the guaranteed income market to become a new battlefield where companies will compete on product innovation, reliability, low-cost, and investor education.
3) Global X ETFs Continues European Growth with the Launch of an Additional Seven Thematic UCITS ETFs
GlobeNewswire | 11/18/2021
Because… While Global X is expanding its product line in Europe, SSGA has created an ETF hub in southern Europe, servicing demand for fixed income, ESG, and model portfolios in the region. As reported by ETFGI, assets of ETFs and ETPs listed in Europe reached a record high of $1.6 trillion at the end of October 2021, up 22.2% from year-end 2020. YTD inflows of $166.8 billion surpassed both the previous YTD record of $94.6 billion set in 2017 and sales of $119.9 billion throughout 2020. Though the European ETF industry is much smaller than its U.S. counterpart, it has considerable growth potential, which has lured U.S.-based ETF providers to set sights on Europe. ETFGI estimated that about 15%-20% of retail investors in Europe use ETFs, compared to approximately 40% in the U.S. Demands from retail investors and their adoption of this investment vehicle could make a difference in the pace of European industry growth. ETF providers that can successfully tap into retail channels may steal market share from competitors.