This week saw announcements that BlackRock and Global X would become the latest issuers rushing to jump on the bandwagon of launching European defence ETFs.
The theme emerged with WisdomTree launching an in-house-built European defence index coinciding with Donald Trump entering his second term in office. The subsequent launch of the firm’s related ETF – the first of its kind – came within a week of the US President withdrawing funding to Ukraine in March.
With the ETF amassing $1.4bn assets under management (AUM) in just six weeks, rival strategies from HANetf and BNP Paribas Asset Management hurried to market.
By the time Ignites Europe revealed BlackRock and Global X would be entering the fray this week, the STOXX Europe Total Market Defense Capped index had rallied 41% year-to-date – well ahead of the broader STOXX Europe 600 which sat at a 1.2% loss over the same period.
ETFs drive gold
Elsewhere, inflows into gold exchange-traded products (ETPs) propelled gold past the $3,500 per ounce mark for the first time as investors flocked to safety amid tariff uncertainty and President Trump’s threats to oust Jay Powell from his position as Chair of the Federal Reserve.
As ETF Stream highlighted earlier this year, the historically reliable relationship between ETF flows and the gold price broke down in 2023 and 2024 but it has returned with a vengeance so far this year – with ETF inflows forcing gold through $3,000 and then $3,500 just one month later.
After pulling in 226.6 tonnes worth of inflows in the first quarter, gold ETF momentum has accelerated into April with 85 tonnes worth of creations in the two weeks to 18 April, according to figures from the World Gold Council.
ETFs listed in the US and China – the tariff war’s key adversaries – saw the most inflows, with 33.6 and 35.7 tonnes worth of fresh demand in the fortnight respectively. In the case of China, that equates to a 24.2% increase in total gold ETF holdings.
Flow Traders head departs
The CEO of Amsterdam-based Flow Traders, Mike Kuehnel, will step down on 31 August to pursue an opportunity in the artificial intelligence (AI) space.
Meanwhile, Marc Jansen and Alex Kieft have been appointed co-chief trading officers with the former set to join the executive committee of Europe’s second largest ETF market maker.
The changes accompanied a weak Q1 trading update, which revealed net trading income grew but profitability suffered as a result of significant increases in fixed costs. The firm’s share price fell 20% on Thursday.
