Industry Updates

ETF Wrap: The Israel-Hamas conflict impact on ETFs

Asset class movements during wartime, a tussle in ETF issuer rankings and ESG product categorisation made headlines this week

Jamie Gordon

Geopolitics was once again front-and-centre across asset classes addressed by ETFs following escalation in the Israel-Hamas conflict.

The world’s largest oil exchange-traded product (ETC), the WisdomTree Brent Crude Oil ETC (BRNT), rose 3.8% on Monday as Hamas’ attack on Israel on Saturday pushed the price of oil above $87 a barrel.

Defence thematic ETFs from HANetf and VanEck also gained approximately 8% this week as investors anticipated higher demand for military hardware.

However, the conflict added to an already uncertain picture for fixed income. With Iranian involvement raising the question of a supply – and price – shock in energy, central banks could be encouraged to maintain hawkish policy stances.

DWS steals the limelight

Turning to Europe’s ETF industry, DWS gained ground on rival firm Amundi in Q3 after booking more than double the inflows of its rival.

DWS boasted $7.5bn net new assets over the quarter, representing almost 20% of all flows into European exchange-traded products (ETPs).

Are sustainability thresholds meaningful? 

Finally, this week saw Invesco join Amundi in increasing the ESG thresholds on its Paris-aligned and multifactor ETFs after the European Commission made changes to say sustainability can be measured at a company rather than individual activity level.

Interestingly, both ETF issuers said the changes would not impact the investment policies of their ETFs. The moves appear to represent regulatory shuffle, rather than actual changes to products’ sustainable credentials.

ETF Wrap is a weekly digest of the top stories on ETF Stream

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