Industry Updates

ETF Wrap: World ETF flash crash

BlackRock’s world ETF undergoing a brief crash on Deutsche Boerse, ARK Invest entering Europe and ESG entering ‘crisis’ period all made headlines this week.

Lauren Gibbons

BlackRock's world ETF listed on the Deutsche Boerse experienced a sudden 5% drop in price shortly after US jobs data was released earlier this month.

The $74.4bn iShares Core MSCI World UCITS ETF (EUNL) briefly encountered a flash crash at 2.30pm CET on 5 April but quickly recovered as normal trading resumed.

Despite the incident, other listings of the ETF across different exchanges remained stable.

Following the crash, Deutsche Boerse conducted an investigation that did not reveal any signs of suspicious trading, market manipulation, or rule violations.

Multiple stop orders were also triggered which exacerbated the decline.

As a safeguard, trading was halted after a 5% volume limit was reached based on the previous night's closing value.

ARK enters Europe

Cathie Wood’s Ark Invest entered the European ETF market, launching three actively managed ETFs spanning innovation, genomics and artificial intelligence.

Anticipation of the launches sparked questions from fund selectors about whether Wood’s success would be replicated in Europe.

After acquiring Rize ETF from AssetCo last September, ARK has launched a European roadshow to engage professional investors, despite concerns about its volatile track record and ‘FOMO-stock’ reputation from retail investors.

Despite past setbacks, Wood said the launches are not just a result of increased interest from European investors, but a “declaration of our long-term commitment to Europe”.

ESG ETFs enter crisis

In Q1, European ESG ETF inflows dropped a staggering 94% to €7.1bn from €13.8bn in the previous quarter, accounting for only 16% of the total €44.5bn inflows.

This shift reflects a broader investor pivot towards US and global developed market exposures.

Despite the general growth in European ETFs – which saw assets reaching a record $1.92trn – ESG funds are experiencing a relative decline, as investors seem increasingly disillusioned with their prolonged underperformance, suggesting a potential crisis for ESG investing.

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