ETF Express Newsletter 04.03.22

Sanctions drive Russian ETFs down and out

Indices have been recalculated and ETFs have been suspended as the Ukraine crisis and the effects of sanctions on Russia have had their impact on financial markets.
Take a look at the latest ETF performance figures from Trackinsight.
Week on week, we usually see almost a binary switch of cryptocurrency ETPs in the top performing and then in the bottom performing, reflecting their extreme volatility. No more - the latest bottom performing figures are all Russian funds.
Trackinsight produced a nice piece of analysis last week on the situation, which revealed that despite huge drops in ETFs investing in Russia and its neighbouring states, some people found it a buying opportunity, while they still could.
Our interviews this week took us to the US to talk to Laton Spahr of SS&C Alps Advisors who explains that the firm has been looking around among the whole SS&C company to create its new product - a pilot programme which will list an alternatives asset allocation model. "I think its classic to what we are able to do within SS&C," Spahr says.
We also spent time in Europe this week, talking to Hortense Bioy who is Global Director of Sustainability Research, Morningstar but is better known to our audience as having been head of ETFs at the firm for a number of years. Bioy reports that global ESG fund assets hit USD2.74 trillion at the end of 2021, up 9 per cent quarter on quarter, while SFDR funds, those classified as Article 8 or 9, hit EUR4 trillion in 2021. She has interesting things to say about greenwashing as well, a term that strikes fear into all fund managers. Bioy reports that in general Morningstar is seeing more disclosure. She says: "There is more disclosure but not necessarily more clarity, especially given the wide range of green. Today greenwashing is the word of the day. Everyone can be accused of greenwashing, whether they hold dirty assets or not."
There can be no doubt that ESG funds are here to stay in their dominating position but a surprise comes in the form of ETFGI’s January figures, which showed ESG ETPs listed globally gathered net inflows of USD9.81 billion during January 2022, considerably lower than the USD19.76 billion gathered in January 2021. Total assets invested in ESG ETFs and ETPs decreased by 3.2 per cent from USD392 billion at the end of December 2021 to USD379 billion, according to the firm.
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Beverly Chandler, managing editor, ETF Express
Companies in this issue
Armada ETF Advisors
Dimensional Fund Advisors
DWS
Global X ETFs
Harbor Capital Advisors
Solactive
Valour
Xtrackers
WisdomTree

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