This week the UCITS springboard effect was put under the microscope, with a growing number of asset managers turning to the European structure to tap ETF demand across Latin America, Asia and the US.
Last month, US issuer Pacer ETFs announced it was entering Europe to capture the “vibrant” market of offshore US investors, who want to avoid the tax burden associated with US-listed ETFs.
Elsewhere, the likes of State Street Global Advisors, HANetf and AXA Investment Managers, have been queuing up to list their ETFs, on venues such as the Bolsa Mexicana.
In fact, Latin America has been the key driver of UCITS ETFs globally, with BlackRock noting investors from the region comprise 27% of iShares UCITS ETF allocations. This owes to the structure’s lower net withholding fees and lack of estate tax for some European jurisdictions.
In Asia, the growth of UCITS can be partially attributed to settlement houses such as Euroclear, which have removed obstacles for local market makers dealing with European products.
An expanding index empire
Elsewhere, MSCI agreed a deal to acquire London-based indexer, Foxberry, in a bid to boost its customised offering.
The indexing giant said it plans to use the firm’s foxf9 platform to enhance its ability to offer client customisation.
Foxberry was founded in 2014 and has been primarily used by thematic and sustainable issuers, including Rize ETF – now ARK Invest Europe – and Legal & General Investment Management (LGIM).
Moving with the times
Finally, well-established players continue to modernise, as Vanguard goes digital and St James’s Place (SJP) goes passive.
Vanguard announced it will launch a UK app, which is currently in development with a launch date yet to be set.
The news follows the firm’s UK personal investment platform hitting half a million users last year and comes ahead of ‘ISA season’ in the UK.
Elsewhere, SJP CIO, Justin Onuekwusi, said the wealth manager will make a push into low-cost passive investing in a bid to give its customers more choice.
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