Industry Updates

ETF Wrap: New launches fall by a third

A convergence in launches and closures, a new $13bn strategy entering Europe and change at BlackRock made headlines this week

Jamie Gordon

New research this week detailed how cost pressures imposed by high interest rates saw ETF launches fall by a third in 2023.

While 254 ETFs launched last year, this was down from 381 in 2022 and marginally below the 268 yearly average since 2008, according to data from Morningstar.

This coincided with the cost of capital for seeding an ETF hitting a 16-year-high.

In addition to a slowdown in launches, 203 ETFs closed last year from providers including JP Morgan Asset Management, Invesco, Franklin Templeton, Rize ETF and HANetf.

$13bn ETF enters Europe 

ETF Stream revealed VanEck has brought its flagship $13bn wide moat ETF to Europe as part of a double launch. 

The firm’s flagship ETF tracks the Morningstar Wide Moat Focus index of 50 companies the index provider believes can maintain their market share. 

‘Economic moats’, first coined by Warren Buffett, focus on companies with a strong brand, cost leadership, economies of scale and high switching costs for users.

Alongside its US moat ETF, VanEck also launched a small and mid-cap moat strategy.

BlackRock: Show must go on 

Finally, BlackRock said in its full-year results, it expects “high growth rates” in European ETFs, driven by the rise of model portfolio services.

The prediction comes after the firm netted $71bn of new ETF assets in Europe last year. 

The world’s largest asset manager is also undergoing a period of upheaval, with the firm;s iShares head Salim Ramji set to depart after a decade.

In 2023, flows into European crypto ETPs more than doubled year-on-year, with a total of $2.3bn of net new assets.

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