ETF Express Newsletter 18.02.22

Top down and macro

This week’s newsletter brings you an interview with Richard Bernstein, the eponym of Richard Bernstein Advisors (RBA), the USD15.7 billion firm he founded in 2009. The firm brings a top down, macro approach to investment. "We know nothing about Coca Cola versus Pepsi," he says. "It’s not what we do."
The bulk of the firm’s assets are invested through ETFs, with some USD12.8 billion in ETF separately managed accounts. RBA has recently launched UCITS products in Europe, through its new relationship with European firm IMGP which has taken a 45 per cent stake in the company.
Electronic trading platform Tradeweb’s Adam Gould has become our latest ETF Innovator, this week, writing: "No matter what the markets have thrown at us over the last several years, the answer has increasingly come in the form of an ETF."
Gould comments that when compared with active and passive mutual funds, ETFs have consistently made it easier for institutional investors to deliver better pricing, improved efficiency, increased transparency and best execution. The numbers show the growth: Tradeweb’s total notional ETF volumes rose 62 per cent in the US and 19 per cent in Europe over the course of 2021, with that trend continuing in 2022, with January’s average daily volume on Tradeweb’s institutional US and European ETF marketplaces reaching USD2.5 billion and USD3.7 billion, respectively.
Bloomberg Intelligence’s ETF analyst Athanasios Psarofagis was also the man with the numbers this week, commenting on passives generally but boldly predicting that sustaining 2021's rate of ETF inflows could push passive assets past USD20 trillion within two years.
However, in Europe, ETPs hold only about 10 per cent of assets, the lone region where index funds are preferred, partly, Psarofagis says, due to the lack of a significant tax advantage. Europe's retrocession fees also incentivise a push toward active funds.
While the UK has gone through the RDR process, ETFs are still struggling here. ETF Express’s sister title Wealth Adviser has a feature this week from Philippa Aylmer which details the ways in which it is hard for UK financial advisers to use ETFs. Follow this link to read her piece, entitled Can FCA policies on ESG advice generate new interest in ETFs?
Beverly Chandler
Managing Editor, ETF Express
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Companies in this issue
Bloomberg Intelligence
BMO
Chimera Capital
Global X ETFs
GSAM
Harbor Capital Advisors
Richard Bernstein Advisors
Simplify
Tradeweb
Valour
Xtrackers

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