SEC Filings | 11/12/2021
Because… Besides Amplify, DFA launched Dimensional Inflation-Protected Securities ETF earlier this week. AXS Investments and Rareview Capital filed for AXS Astoria Inflation Sensitive ETF and Rareview Inflation/Deflation ETF, respectively, last month. Industrywide, Inflation-Protected Bond ETFs raked in $28.3 billion this year through September, surpassing Intermediate Core Bond’s YTD sales of $27.4 billion and becoming the top-selling bond category in the ETF space. This is impressive considering Inflation-Protected Bond ETFs only had $89.2 billion of assets, less than half of assets in Intermediate Core Bond ETFs ($211.8 billion). Last year, this group of funds gathered $13.0 billion, representing only 37% of Intermediate Core Bond’s intake of $35.3 billion. Assets of Inflation-Protected Bond grew 62% from a year ago, much faster than Intermediate Core Bond’s 19% and Short-Term Bond’s 36%. With the annual inflation rate surging to 6.2% in October 2021, the highest since November 1990, investors have become worried about rising rates. Their concerns will continue to drive them to seek inflation-protection strategies. Asset managers with expertise in this area should seize the opportunity and introduce more ETFs to help investors hedge against inflation.
Press Release | 11/15/2021
Because… VanEck Bitcoin Strategy ETF (XBTF) is the third bitcoin ETF on the U.S. market. ProShares Bitcoin Strategy ETF (BITO), which was launched a month ago, has already amassed $1.4 billion. Valkyrie Bitcoin Strategy ETF (BTF), which made its debut three days later, only had assets of $57.2 million as of November 18, 2021. While XBTF does not have the first mover advantage, it boasts the lowest expense ratio among the three. Its 0.65% fee is 30 basis points lower than that of BITO and BTF. However, for more sophisticated investors, low cost is not the only determining factor. They also take trading costs into consideration. Generally larger and more heavily traded securities have narrower spreads. The average bid/ask spread is 0.04% for BITO and 0.09% for BTF, but it goes up to 0.60% for XBTF, as reported by Morningstar. Since traders pay more attention to trading costs and long-term holders focus more on expense ratios, the asset-gathering ability of these funds may give us a hint about which type of costs is relatively more important to investors and what is their primary purpose of owning these ETFs.
Schwab | 11/16/2021
Because… Schwab is the fifth largest ETF provider despite its small number of offerings. It had $251.5 billion of assets in 26 ETFs as of September 2021, translating into an average fund size of $9.7 billion, second only to Vanguard. In the first three quarters, the firm raked in $32.3 billion, with an average fund intake of $1.2 billion, more than tripling iShares’ average of $357 million. According to Morningstar data, ESG ETFs had assets of $108.5 billion as of September, with BlackRock dominating both the active and passive spaces. The firm had $1.9 billion in active ESG ETFs and $60.6 billion in passive ESG ETFs, accounting for 48% and 58% of the total assets in their respective fields. When excluding BlackRock, active ESG ETF providers had average assets of $76 million, indicating that Schwab has the potential of becoming a strong contender. Schwab Ariel ESG ETF is the first actively managed ETF at the firm. As an early adopter of socially responsible investing, Ariel’s long history of devoting itself to the ESG cause may help Schwab win over true ESG believers.