Welcome to ETF Ecosystem Unwrapped 2021! Follow this page for live updates from the event including quotes, opinion and analysis of the sessions ahead. We are currently live so follow this link here to be a part of Europe's largest ETF event of the year.

And that is the end of our inaugural ETF Ecosystem Unwrapped Event! We hope you have enjoyed the past two days of content, which featured an array of insightful sessions discussing what is a truly fascinating time in the European ETF industry. On behalf of the whole ETF Stream team, we would like to thank all of our sponsors, our speakers and - of course - all attendees for logging on and getting involved. All sessions will be available for playback and we look forward to seeing you all in person for future events. 

16:46 Fireside chat: One year on from George Floyd: Where do we go from here?

A fascinating and thought-provoking talk from BlackRock managing director and #Talkaboutblack co-founder Gavin Lewis. A year on from the death of George Floyd, Lewis talked about what had changed and how there is still a lot of work to be done. Tackling the misconceptions around the issue, Lewis discussed how now is the time to act upon the unprecedented mainstream attention racial inequality and #blacklivesmatter has received. 

16:46 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "There is a lot of mainstream attention now, this time it can be different. The important thing is how do we action this?"

16:45 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "Look at climate change and the role of plastic bags, a simple but important step for people to start doing something. With race, I say ask yourself what's your plastic bag? Where can you start?"

16:43 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "I would tell any C-suite leaders now, treat this as a business problem. It's not just an HR issue."

16:42 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "Fortunately there are a whole group of diversity warrior who are pushing the agenda. I would say if you want your firm to do more on this front, there are a lot of initiatives you can support and take part in."

16:38 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "With #Talkeaboutblack we have been established five years now and it was an organic creation, that this issue of race had not got the same amount of airtime as gender when it came to diversity. We started by talking about our experiences."

16:35 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "Very often the diversity and inclusion push is seen as an HR push and a values discussion. To move the dial on that is difficult as some firms are just not ready for that."

16:33 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "Corporations are making a conscious effort to hire more diverse candidates, but there are still problems. Diverse candidates still have to fit in with a different culture. It's like arriving in a different country and being expected to speak the language upon arrival." 

16:32 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "When I was younger, I was told I was not rounded enough whenever I applied for entry jobs. I had to work at a supermarket in my summers to afford universities while others could afford to travel and do unpaid internships. That's another example of inequality impacting recruitment."

16:30 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "Society is unequal and when you add the racial aspect that only increases. Corporations don't operate in a bubble, they draw talent from the top group. It's bewildering when we look at why black people are under represented in finance - it's because they are under represented in the top schools and universities where recruitment is focused."

16:27 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "Even though I am now a senior finance professional, when I was at school they assumed I had learning difficulties. The statistics would show young black boys are failing academically but we need to ask why that is. There is a tendency to assume if you're a certain characteristic then you cannot be taught."

16:25 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "The medium we have, of social media, that we quickly reach more people means greater awareness but there is less regulation. What is actually the truth? If you're not familiar with the subject matter it's hard to cut through the noise."

16:24 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "What concerns me is the extremes of the situation, such as those who dismiss this is a problem and don't understand why it is being discussed."

16:22 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "To make it more tangible, how do we influence the economic situation and opportunities facing these people?"

16:21 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "There is now an awareness. The challenge is how do you actually make that into something more tangible."

16:20 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "For me, fundamental change comes down to a few things. What is different is this time the issue is not just being owned by minorities, we have seen the majority of people acknowledging responsibility."

16:19 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "We need to ask, with reform are we actually changing the situation and what are going to do ensure things are genuinely different."

16:18 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "Looking back, all the way to the 60s, we have seen many 'pivotal moments' of change. It is easy to say this time it's different but I do question it. Why is there this outrage every 10-15 years and then things revert. I don't want this to continue."

16:15 Fireside chat: One year on from George Floyd: Where do we go from here?

Lewis: "This still remains somewhat a taboo subject for many."

16:14 Fireside chat: One year on from George Floyd: Where do we go from here?

It's time for our final session of the day and the event itself. To discuss the role of racial inequality and inclusion in the industry, editor Tom Eckett is joined by Gavin Lewis, Managing Director at BlackRock and Co-founder of #Talkaboutblack.

16:11 Women in ETFs: Outlook for the European ETF industry

A very interesting panel from several members of Women in ETFs. They discussed how a lot of great progress has already been accomplished, but there is still much to do. In particular, mentoring programmes still have to be supported within the industry to foster an exchange of ideas and promoting female speakers to share their thoughts and highlight the importance of diversity.

16:09 Women in ETFs: Outlook for the European ETF industry

Comninos: "Because of our historic inequality challenges, in South Africa we are very aware of diversity. As such we have targets in all our industries and I think we have really made significant progress."

16:05 Women in ETFs: Outlook for the European ETF industry

Bourcier: "For women, and what I'm hearing, is that mentoring has been really helpful to them because it brings a sharing of experience."

16:03 Women in ETFs: Outlook for the European ETF industry

Bourcier: "I started in ETFs close to 20 years ago and it has been a fascinating journey, because there is always something new." 

16:02 Women in ETFs: Outlook for the European ETF industry

Comninos: "In South Africa, more investors are looking to invest globally. We have seen more globally-focused ETFs being launched recently."

15:59 Women in ETFs: Outlook for the European ETF industry

Fuhr: "ESG is the one place where Europe is larger than the US."

15:57 Women in ETFs: Outlook for the European ETF industry

Bourcier: "2021 is the year of the product development as we will need to adapt everything we have."

15:56 Women in ETFs: Outlook for the European ETF industry

Bourcier: "My vision for Europe is due to the change in regulation, we will see greater ESG adoption across ETFs. It's very important we can come up with new products adapted to upcoming regulations that are still not finalised."

15:55 Women in ETFs: Outlook for the European ETF industry

Fuhr: "We have established an international Women in ETF speakers bureau to get that diversity of insight and speakers out there."

15:51 Women in ETFs: Outlook for the European ETF industry

Fuhr: "Several years ago we only had a few exchanges take part in bell ringing. Now, we have over 100 taking part."

15:50 Women in ETFs: Outlook for the European ETF industry

Comninos: "We have also made sure we have done bell-ringings and celebrated International Women's Day. But, being South Africa, we use the vuvuzela!" 

15:46 Women in ETFs: Outlook for the European ETF industry

Bosoni: "We used to host events for International Women's Day in the Borsa Italiana venue. Last year we had to cancel because of COVID-19, but this year we were able to do an online celebration. It is such an important event and it was great we had so many speakers take part, including our CEO."

15:43 Women in ETFs: Outlook for the European ETF industry

Comninos: "Last year we launched our first mentorship programme [in South Africa] but with a real blast. We had 90 participants in total, which is quite big, with at least 30% male participants. It ended up with 50 pairs of mentors and mentees. It was really great with several events."

15:41 Women in ETFs: Outlook for the European ETF industry

Bourcier: "It's also important for diversity that we have a male membership in Women in ETFs."

15:40 Women in ETFs: Outlook for the European ETF industry

Bourcier: "Mentorship has always been important for Women in ETFs and we have now launched the first scheme in France. It's very important for women as a whole, as well as diversity generally."

15:35 Women in ETFs: Outlook for the European ETF industry

Welcome back for our final sessions of the day. For our next panel, joining Women in ETFs co-founder Deborah Fuhr is: 

Isabelle Bourcier, Head of Quantitative and Index, BNP Paribas Asset Management

Silvia Bosoni, Head of ETFs, ETPs and Open End Funds, Borsa Italiana

Nicola Comninos, Group Chief Risk Officer, JSE

15:10 We will now take a short break but return for our next sessions at 13:35.

15:06 1v1 interview: Best ETF execution practices

A great talk from Daniel Izzo, CEO of market maker GHCO. He gave his unique view on the rise of RFQ and what the industry can do to encourage ETF trading back on-exchange. With the current situation largely created by MiFID III, he is unsure of the use of regulation to bringing resolution to this. 

15:06 1v1 interview: Best ETF execution practices

Izzo: "The problem with blockchain is the majority of transactions in these cryptos are not being reported to the ledger. This produces counterparty risk to your digital wallet provider."

15:01 1v1 interview: Best ETF execution practices

Izzo: "I think the ETF product is really helping provide more structure to a market that does not have any."

15:00 1v1 interview: Best ETF execution practices

Izzo: "The most legitimate thing in crypto is the ETF. At the very least you have a registered and transparent product."

15:00 1v1 interview: Best ETF execution practices

Izzo: "[With crypto] it's all down to ETFs, we should all pat ourselves on the back."

14:59 1v1 interview: Best ETF execution practices

Izzo: "Do I think there is room for improvement? Absolutely. Is this as a result of MiFID II? Yes. My only reservation about further regulation to correct changes is better the devil you know. As much as I want this to be fixed, the less confident I am about that being the way to do it."

14:56 1v1 interview: Best ETF execution practices

Izzo: "For exchanges to bring an RFQ model on board is critical to attract liquidity."

14:54 1v1 interview: Best ETF execution practices

Izzo: "A critical thing for people to understand about exchange-driven RFQ is a message interface, which means all market participants connected to it can respond."

14:53 1v1 interview: Best ETF execution practices

Izzo: "As ambitious as I am, I can't pretend we - as a market maker - will drive that on-exchange shift."

14:50 1v1 interview: Best ETF execution practices

Izzo: "I would advise people not to be fooled by their own size. Yes, liquidity premium is definitely a measure but there is a right way and a wrong way to trade big sizes."

14:48 1v1 interview: Best ETF execution practices

Izzo: "There are some basic things people can do to help themselves. One is to check the exchange before running off to the RFQ."

14:46 1v1 interview: Best ETF execution practices

Izzo: "The reality is market makers are usually the only ones providing liquidity. Our pricing generally provides a good baseline but out of necessity the RFQ model has evolved. But I think everyone would agree it's best to move away from RFQ and move back on-exchange."

14:44 1v1 interview: Best ETF execution practices

Izzo: "But I'm hopeful, the market evolves and comes up with great solutions. However each solution is one more complexity as a workaround instead of centralisation. It's going to be a long road."

14:42 1v1 interview: Best ETF execution practices

Izzo: "I'm loathe to say it but I think the delay [to things like consolidated tape] is just down to the decentralised way of doing things in Europe."

14:41 1v1 interview: Best ETF execution practices

Izzo: "What I love about the European market, is nearly all market participants largely agree on all the most important issues."

14:39 1v1 interview: Best ETF execution practices

It's now time for our next one-on-one interview. Joining editor Tom Eckett is Daniel Izzo, CEO of GHCO.

14:38 ETF liquidity: Improving market structure

Another great panel talk with our experts talking about where liquidity structures can be improved in Europe. With uncertainty still lingering around the CSDR, the panellists pointed to areas where improvements could still be made such as reducing costs for new entrants. In addition, the panellists shared their experience of ISD migration and how Brexit was a catalyst for change across the industry.

14:33 ETF liquidity: Improving market structure

Xavier: "We don't know when CSDR will come in but I look at it and see a lot of uncertainty. And the market hates uncertainty, it's no different in this scenario."

14:30 ETF liquidity: Improving market structure

Stewart: "We are looking at making our model leaner." 

14:28 ETF liquidity: Improving market structure

Goldie: "Brexit was a good thing in a way as it made everyone bite the bullet and get on with it."

14:28 ETF liquidity: Improving market structure

Goldie: "At Invesco, we were not as fortunate and we had to migrate funds to the ISD model. There was a lot of work that had to be done there, but Brexit helped push us through these migrations prior to 2020."

14:27 ETF liquidity: Improving market structure

Xavier: "When you have an ISD framework it makes it so much easier for global investors to buy UCITS. As an international player, we fully recommend it."

14:25 ETF liquidity: Improving market structure

Stewart: "There is still a perception that it is expensive to bring ETFs to market in Europe, so that is something we have to work on as infrastructure providers."

14:21 ETF liquidity: Improving market structure

Goldie: "We've all been talking about a consolidated tape for some time. But there is still a lot of work to go on this."

14:19 ETF liquidity: Improving market structure

Stewart: "A consolidated tape is part of a broader need for transparency. We already have a lot of that data, due to the harmonised and standardised way ETFs have been brought to market in Europe."

14:17 ETF liquidity: Improving market structure

Xavier: "Martin Gilbert is effectively telling us ETFs is the only fund wrapper that will bridge from asset management to a new digital way of working."

14:16 ETF liquidity: Improving market structure

Xavier: "In the last 12 months we have seen more chief investment officers and chief risk officers coming to the table and talking to us about fixed income ETFs. I think this was clear from the way they held up in March 2020, so we have a new audience to talk to."

14:15 ETF liquidity: Improving market structure

Xavier: "It's indeed about educating clients, and getting around the archaic mutual fund selection processes that are still applied to ETFs."

14:10 ETF liquidity: Improving market structure

Stewart: "What I have been seeing is volumes going up and down across on and off-exchange. Though I'm aware of what's going on off-exchange, I would say the market is lively on both sides of that."

14:08 ETF liquidity: Improving market structure

Stewart: "With improving the infrastructure generally, it's about practicalities. Helping market makers navigate the market properly. That's what we have to focus on."

14:06 ETF liquidity: Improving market structure

Goldie: "We still have a lot of education to be done in Europe." 

14:05 ETF liquidity: Improving market structure

Xavier: "Things are improving in Europe. But at some point we have to acknowledge we are a different market to the US and we are fragmented. Let's accept we have the pipes where they are for the moment, but on the whole it is very positive."

14:03 ETF liquidity: Improving market structure

Xavier: "We have Martin Gilbert telling us he is converted, the ETF train has truly left the station."

14:02 ETF liquidity: Improving market structure

Stewart: "Europe has had to look at how its structured and effectively how it is centralised."

14:00 ETF liquidity: Improving market structure

Welcome back and it's now time for our next panel discussion. To discuss the dynamics of market liquidity and how we can improve, editor Tom Eckett is joined by:

Allan Stewart, Vice President, Investment Fund Services, Clearstream

Jason Xavier, Head of EMEA Capital Markets, Franklin Templeton

Jim Goldie, Head of Capital Markets, EMEA, ETFs and Indexed Strategies, Invesco

We hope you've enjoyed this morning's sessions. We'll take a lunch break now and be back at 14:00 for more expert insights. 

12:11 The Big Interview: An insider’s view on disruption within financial services

Fascinating talk from Martin Gilbert, the chairman of Revolut. He expressed his regret at not getting involved in ETFs sooner earlier in his asset management career and described active ETFs as "the future" and a "great wrapper". Most interesting, he said it was inevitable that challenger bank Revolut would inevitably get into asset management at some point and that ETFs could play a role in this. 

12:09 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "Markets right now remind me of 1999. But you don't want to be in bonds anymore. We've had a 40 year bull market in bonds, so I think we are moving towards a flat to bear market there."

12:06 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "I'm positive on the ETF space, and especially the active ETF space. It's a great wrapper."

12:06 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "With AssetCo, we'd love to acquire an ETF provider but none are small enough. We want to acquire at the boutique level."

12:04 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "I think the banks will buy the wealth managers off the private equity firms. Private equity who are consolidating pretty well will want to sell quickly, especially as everyone has so much cash right now."

12:03 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "Asset managers are watching crypto with interest but they are just worried about the regulators."

12:02 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "Crypto has helped Revolut through the crisis. Trading of these assets have been very strong."

12:01 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "Active ETFs will take off in Europe, they are the future."

12:00 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "The whole fintech business is built around attacking the soft underbelly of banks. But why have they not done better in the wealth space? They may do better as people in this country realise they need to look after their own wealth more. Nutmeg was probably too early."

11:59 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "More banks are moving back into asset management and wealth. There is no reason they shouldn't succeed, they have the clients after all."

11:59 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "The likes of Vanguard and BlackRock are not too powerful, it's still a very fragmented market. And the bulk of their stuff is in passive. Also, with asset managers I would say look at the revenues, not the assets under management."

11:57 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "Investment trusts are a great product for the investor and the manager. Why have robo not gotten involved in it? I would say because it has not marketed itself well. Open ended funds have killed them. But it's still a great area to be involved in."

11:56 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "The big negative is daily liquidity of putting certain asset classes into open ended funds. We saw this with Neil Woodford."

11:54 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "Inevitably, Revolut will have to get into asset management. There are no plans at the moment but you cannot avoid it. ETFs would be an ideal product to offer, we'd have to go in with the low cost option."

11:53 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "As the next generation inherit money, they will definitely not go to the incumbents. There will be a massive move to the Revoluts of this world. If we went into asset management we would be a serious player in the market."

11:52 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "With robo, I think there is a reluctance for individuals to change hence why the incumbents have the advantage." 

11:51 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "I wish I'd seen the future with ETFs, I made a mistake not getting into them."

11:50 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "I think any asset manager should have ETFs now, it's a great wrapper. ETFs are very much the future for asset managers."

11:50 The Big Interview: An insider’s view on disruption within financial services

Gilbert: "There is still a place for active management, it's just been so hard in the US which has been dominated by passive players."

11:47 The Big Interview: An insider’s view on disruption within financial services

Apologies, we had a temporary tech disruption there. Now, we are joined by Martin Gilbert, Chairman, Revolut who is talking with our founder David Stevenson

11:32 Policy and regulation: Key developments in the European ETF space

O'Leary: "From a client basis, more are asking about non-transparent ETFs. When it is allowed I'm not sure you will see a huge rush but over time there will be pickup because there is demand for it."

11:30 Policy and regulation: Key developments in the European ETF space

O'Leary: "At a philosophical level, if you tell a regulator they will not have disclosure [in terms of non-transparent ETFs] you will get resistance."

11:27 Policy and regulation: Key developments in the European ETF space

Lovegrove: "We are on the cusp of an interesting time. We are coming to the end of a lengthy IOSCO consultation. The proposals from that will really free up regulators to start revisiting some of their own rules and guidelines."

11:26 Policy and regulation: Key developments in the European ETF space

Fitzpatrick: "Everyone needs to make technology and personnel changes to meet this. The impact to overheads will be a challenge."

11:23 Policy and regulation: Key developments in the European ETF space

Fitzpatrick: "If you look at the cash penalties, they can also be quite punitive." 

11:22 Policy and regulation: Key developments in the European ETF space

Fitzpatrick: "A mandatory buy-in regime is being proposed in CSDR which brings about concern, that it will impact the pricing of ETFs."

11:21 Policy and regulation: Key developments in the European ETF space

Fitzpatrick: "At the heart of it, CSDR is very positive as its trying to harmonise the European CSD market and ensuring the buyer is properly protected."

11:20 Policy and regulation: Key developments in the European ETF space

Fitzpatrick: "With CSDR, it's a very wide reaching regulation. It was a slow start from a regulatory standpoint but we are seeing an awakening in the market."

11:16 Policy and regulation: Key developments in the European ETF space

Lovegrove: "Level I was about 'where do you think you are', and Level II is 'show me why'. There is now a concern that people will scrutinise you and your categorisations."

11:16 Policy and regulation: Key developments in the European ETF space

O'Leary: "We are now seeing people having a reclassification of their funds, and asking how they will prove they meet the criteria around sustainable products [in the eyes of the regulation]."

11:15 Policy and regulation: Key developments in the European ETF space

O'Leary: "People are still getting their head around the classifications, and defining how green a particular product is or isn't."

11:14 Policy and regulation: Key developments in the European ETF space

O'Leary: "ETF providers have to be sure they are getting the right information from index providers." 

11:13 Policy and regulation: Key developments in the European ETF space

O'Leary: "A big issue coming down the tracks is in relation to reporting requirements."

11:12 Policy and regulation: Key developments in the European ETF space

O'Leary: "The initial classification of the product has taken the most time. For ETF providers, that can be difficult." 

11:11 Policy and regulation: Key developments in the European ETF space

Lovegrove: "I would encourage everyone to engage with [SFDR] as it's a big job coming down the road."

11:11 Policy and regulation: Key developments in the European ETF space

Lovegrove: "At the moment we are engaging with all parties and trying to get a handle on how these regulations will be implemented."

11:09 Policy and regulation: Key developments in the European ETF space

Lovegrove: "With the SFDR, it's an industry-wide piece of regulation that has been dominating our minds for 18 months. The whole aim is to incentivise channelling of capital into sustainable projects. We are pausing for breathe at the moment."

11:06 Policy and regulation: Key developments in the European ETF space

Welcome back and it's time for our panel on regulatory developments. Joining guest moderator Keshava Shastry, chair of the ETF Task Force for EFAMA, is:

Ciaran Fitzpatrick, Managing Director and Head of ETF Servicing, Europe, State Street

Philip Lovegrove, Partner, Asset Management, Matheson

Ciara O’Leary, Partner, Dechert

10:44 In the hot-seat: Entering the European ETF market

Some very interesting insights from Frank Mohr, Managing Director of Global Head ETF Sales Trading at Société Générale, and Véronique Dang Vu, Product Engineer, of Société Générale Securities Services. They explained the challenges facing new entrants to the European ETF market, with fragmentation and higher costs identified as the most common cause of failure. There are signs of encouragement however, and they discussed how more retail investors are now getting involved. To further encourage this, both are calling upon lawmakers to improve harmonisation in Europe. 

10:40 In the hot-seat: Entering the European ETF market

Dang Vu: "You cannot compete on the vanilla ETF here, the costs are too high and the ranges are too full. But there is still room for innovation."

10:38 In the hot-seat: Entering the European ETF market

Dang Vu: "We would like all the countries to make better efforts to harmonise these things, which should improve costs for investors. Of course we have things like cross border agreements and trading, but it is still disappointing."

10:37 In the hot-seat: Entering the European ETF market

Dang Vu: "Having a more harmonised way of settling will be a step in the right direction."

10:36 In the hot-seat: Entering the European ETF market

Mohr: "If you enter the European ETF market you have to be aware that costs will be much higher."

10:34 In the hot-seat: Entering the European ETF market

Mohr: "In an ideal world we will have the same environment as the US."

10:32 In the hot-seat: Entering the European ETF market

Dang Vu: "Europe is not only fragmented, it is also very OTC. New regulations should hopefully help by bringing better transparency."

10:30 In the hot-seat: Entering the European ETF market

Dang Vu: "There are things in Europe that are getting closer to the US. Even five years ago, it was more fragmented and it has dramatically improved. We have also seen a big shift from synthetic to physical ETFs."

10:29 In the hot-seat: Entering the European ETF market

Dang Vu: "From the US investor's point of view, they are used to a mature market. The most difficult thing for them will be the fragmentation."

10:27 In the hot-seat: Entering the European ETF market

Mohr: "The retail market is picking up, even though this is still a predominantly institutional space."

10:25 In the hot-seat: Entering the European ETF market

Mohr: "We have 30 exchanges in Europe and it will take a long, long time before we get to a singular market."

10:23 In the hot-seat: Entering the European ETF market

Next we have a hot-seat interview. Joining ETF Stream editor Tom Eckett are Frank Mohr, Managing Director of Global Head ETF Sales Trading at Société Générale, and Véronique Dang Vu, Product Engineer, of Société Générale Securities Services

10:22 1v1 interview: Examining the evolution of on-exchange ETF trading

A very interesting interview with Brieuc Louchard, Head of ETFs at Euronext. He talked to ETF Stream editor Tom Eckett about the surge of on-exchange ETF trading in Europe and how this was an important step to the market maturing and catching up with the US. Looking forward, Louchard explained how greater liquidity will be vital to encourage and this will have to come from greater retail investor involvement. 

10:17 1v1 interview: Examining the evolution of on-exchange ETF trading

Louchard: "The more interaction we have between retail market makers and institutional players the better for the market. If a MiFID III can do that in any way that would be a positive impact."

10:16 1v1 interview: Examining the evolution of on-exchange ETF trading

Louchard: "The main impact of MiFID II was clearly around transparency. I remember from my days trading we did most OTC trades on the phone with no requirement to make records. Thanks to MiFID II the volume is now visible for everyone and has helped people understand what the level of liquidity really is."

10:14 1v1 interview: Examining the evolution of on-exchange ETF trading

Louchard: "The more we harmonise in Europe, the easier it will be for investors to understand the market and use ETFs here."

10:13 1v1 interview: Examining the evolution of on-exchange ETF trading

Louchard: "M&A is extremely powerful  because fragmentation is such a challenge for some investors."

10:12 1v1 interview: Examining the evolution of on-exchange ETF trading

Louchard: "I look forward to us reaching a point of maturity in Europe where we have greater liquidity and involvement from all kinds of investors."

10:09 1v1 interview: Examining the evolution of on-exchange ETF trading

Louchard: "In the US, ETF participation is almost 50/50 split between retail and institutional. The population are just more used to looking after their own savings. This is starting to change with new generations in Europe."

10:07 1v1 interview: Examining the evolution of on-exchange ETF trading

Louchard: "Will Europe become more like the US market as it matures? I wish! It is starting to happen and we are seeing signs of this."

10:06 1v1 interview: Examining the evolution of on-exchange ETF trading

Louchard: "We have identified some players that have developed very interesting algorithms that they are implementing via ETFs. This algorithm will automatically look for discounts and increase participation on behalf of the investor. We think that is extremely clever."

10:01 1v1 interview: Examining the evolution of on-exchange ETF trading

Louchard: "I think the global players are coming back because of the spike in volume they have seen, so there is an opportunity for them again."

09:59 1v1 interview: Examining the evolution of on-exchange ETF trading

Louchard: "We have also seen more liquidity providers come onto the exchange. Big global players which were less active in ETFs have come back."

09:57 1v1 interview: Examining the evolution of on-exchange ETF trading

Louchard: "If you look at retail investor participation between 2015 and 2019 was around 6%. But full year 2020 and YTD 2021, it is now at 15% so more than double. This is a very positive evolution."

09:55 1v1 interview: Examining the evolution of on-exchange ETF trading

Louchard: "It is interesting this volume of new investors is still there. I think we have had a wave of new investors who are here to stay."

09:54 1v1 interview: Examining the evolution of on-exchange ETF trading

Louchard: "Lockdown had a big impact, with more people at home with more time to spend thinking about their savings and how they invest. This was one of the drivers behind the boost seen in ETFs."

09:53 1v1 interview: Examining the evolution of on-exchange ETF trading

Next, Brieuc Louchard, Head of ETFs at Euronext, talks with ETF Stream editor Tom Eckett.

09:52 CEO session: Future developments in the European ETF industry

A great panel discussion to kick off the second day of ETF Ecosystem Unwrapped event. Our panellists gave their first-hand insights on the product development trends of ETFs in Europe, where they see fragmentation as still posing a challenge for new entrants. There also remains some fundamental misunderstandings of ETFs and how they can be used by intermediaries, but this is gradually being broken down. As such, demand for ESG and fixed income products will be clear themes in future launches according to our panellists.

09:48 CEO session: Future developments in the European ETF industry

Fulton: "When I measure our firm's AUM in crypto, then we'll know its a currency."

09:48 CEO session: Future developments in the European ETF industry

Fulton: "With ESG and how everyone defines it, the full transparency of ETFs can be a real advantage for investors approaching this. That is probably why ESG ETFs are taking up such a large chunk of flows."

09:40 CEO session: Future developments in the European ETF industry

Dzanis: "Any firm coming into this space has to have a clear proposition. And there is no proxy for experience."

09:39 CEO session: Future developments in the European ETF industry

Fulton: "Non-transparent ETFs is not something we use in our active strategies in the States, as one of the main attractions of ETFs is their transparency."

09:37 CEO session: Future developments in the European ETF industry

Fulton: "In our space [advisory and discretionary wealth], there is still a lack of familiarity with the wrapper of an ETF. Once that is overcome it becomes apparent if a portfolio is built around ETFs, it is a very efficient solution."

09:35 CEO session: Future developments in the European ETF industry

Fulton: "Active fixed income ETFs is an area we are looking at [for product development] along with thematics, which are something we have become more well known for."

09:34 CEO session: Future developments in the European ETF industry

Dzanis: "If one wins [in the ETF space], we all win."

09:33 CEO session: Future developments in the European ETF industry

Dzanis: "I do see a commonality of our future launches being around outcome-oriented themes, designed to be scalable building blocks for portfolios. ESG is definitely an aspect of that and there is no question COVID-19 accelerated interest in this theme."

09:32 CEO session: Future developments in the European ETF industry

Andreetto: "Fixed income is a huge opportunity. Is 2021 a good year to be a fixed income manager? No, but at the same time there is a wealth and asset base clearly looking at fixed income to present some of their views."

09:30 CEO session: Future developments in the European ETF industry

Andreetto: "Retrocession will gradually move away as we continue to adopt model portfolio structures in Europe."

09:28 CEO session: Future developments in the European ETF industry

Fulton: "The growth trajectory we are on looks like it will be the same as in the US, albeit with a five or six year lag. The opportunity is definitely there."

09:28 CEO session: Future developments in the European ETF industry

Fulton: "The most obvious challenge for US companies is the fragmentation across Europe in every country. You always think you will understand the extent of that, but it will still surprise you."

09:25 CEO session: Future developments in the European ETF industry

Andreetto: "92% of fixed income ETF trading is happening OTC. So getting better transparency there will take some work."

09:24 CEO session: Future developments in the European ETF industry

Andreetto: "Multiple exchanges are clearly just a norm in how we operate here [in Europe]. New entrants will have to think about scale and where they list when coming to Europe."

09:22 CEO session: Future developments in the European ETF industry

Andreetto: "The maturity of understanding of ETFs has reached a point where there is a level playing field in Europe."

09:21 CEO session: Future developments in the European ETF industry

Dzanis: "There are certainly differences with Europe, as each country will have their own unique product differences and tastes. Its more of an institutional marketplace as well. But there is true opportunity to grow here."

09:20 CEO session: Future developments in the European ETF industry

Dzanis: "We definitely see the European market as an opportunity." 

09:19 CEO session: Future developments in the European ETF industry

Fulton: "People are starting to differentiate between the wrapper and the strategy. People now know an ETF can be more than just a passive fund or a tracker."

09:18 CEO session: Future developments in the European ETF industry

Fulton: "The most interesting thing has been the growth of model portfolios, with discretionary fund managers understanding how they can use ETFs to really add value in a post MiFID world. ETFs have emerged as useful tools and building blocks in this."

09:16 CEO session: Future developments in the European ETF industry

Andreetto: "Last year ETFs were tested but they not only passed, they passed with an A+."

09:15 CEO session: Future developments in the European ETF industry

Andreetto: "ETFs are really being used as a tool to access liquidity, and we saw a lot of that last year."

09:13 CEO session: Future developments in the European ETF industry

In our first panel session of the day, editor Tom Eckett is joined by: 

Matteo Andreetto, Head of SPDR ETFs EMEA, State Street Global Advisors

Marie Dzanis, Head of Asset Management, EMEA, Northern Trust Asset Management

Derek Fulton, CEO, First Trust

09:05 Good morning and we are back for the second day of ETF Ecosystem Unwrapped. We have plenty more content in store today, featuring insight from experts throughout the industry and our first panel session is due to start at 9:15. 

That's all we have time for today, we hope you have enjoyed what has been a schedule packed with insight. We will back tomorrow from 9:05 for more keynotes, panel discussions and big interviews. 

17:23 ETF innovation: Where is further product development needed?

A great panel discussion to close of the first day of the first ETF Stream Ecosystem Unwrapped event. Our panel covered many areas of ETF innovation, in particular within fixed income and ESG. Last year highlighted the benefits of accessing fixed income via ETFs over mutual funds, but also contributed to the surging popularity of ESG products. With innovation of ESG ETFs, our panellists discussed how these funds could continue to evolve. In particular, in reacting to changes in investor demand fund groups could further refine and separate ESG credentials (such as focusing on 'E' separately to 'S' and 'G'). 

17:13 ETF innovation: Where is further product development needed?

Cobbe: "I think a lot of active managers were hoping for ESG to be a lifeline, but it lends itself very well to systematic and passive strategies."

17:12 ETF innovation: Where is further product development needed?

Breton: "We still have a way to go with fixed income ETF innovation. It is still lagging but there will definitely be more products in this space."

17:10 ETF innovation: Where is further product development needed?

Breton: "We could see more of a separation between the 'E' and the 'SG' in how products are developed."

17:07 ETF innovation: Where is further product development needed?

Millet: "At a regulatory level, I expect to see more efforts tackling greenwashing [of ESG ETFs] and a greater move towards standardisation."

17:03 ETF innovation: Where is further product development needed?

Cobbe: "Nominal bonds are an issue we need to focus. I think there will be a big rethinking about how we tackle fixed income via ETFs."

17:02 ETF innovation: Where is further product development needed?

Cobbe: "In a few years, we will be looking at all products through an ESG lens. The ESG-ification of ETFs is a huge theme."

16:52 ETF innovation: Where is further product development needed?

Breton: "We have seen an explosion in the ability to tailor a portfolio in the way we would only have dreamed of once."

16:50 ETF innovation: Where is further product development needed?

Cobbe: "People have gotten a lot more comfortable with fixed income ETFs than with opaque fixed income mutual funds, where they don't know what they hold exactly. A traditional OEIC is not the most liquid way of doing this."

16:49 ETF innovation: Where is further product development needed?

Cobbe: "The biggest area we have seen is within fixed income where there has been huge sectoral growth."

16:48 ETF innovation: Where is further product development needed?

Cobbe: "Innovation has been on an amazing trajectory. It's like a tectonic shift in how people make portfolios." 

16:44 ETF innovation: Where is further product development needed?

It's now time for our final panel session of the day. Joining moderator Fabrizio Zumbo, associate director of European Asset and Wealth Management Research at Cerulli Associates, is:

Francois Millet, Head of Strategy, ESG and Innovation, Lyxor

Pacome Breton, Director of Investment Risk, Nutmeg

Henry Cobbe, Head of Research, Elston Consulting

16:40 Keynote ETF innovation: Where to go from here?

A fascinating talk from our keynote speaker, Gregg Guerin, Senior Product Specialist at First Trust. Discussing a rules-based approach, Guerin explained how this helped overcome human biases and poor investment behaviour. From an overall perspective, this can help avoid concentration risk - such as the dominance stocks like the FAANGS now have in some equity ETFs. 

16:33 Keynote ETF innovation: Where to go from here?

Guerin: "The S&P 500 is more susceptible to a FAANG correction today than our portfolio, due to our rules-based approach which has limited exposure."

16:32 Keynote ETF innovation: Where to go from here?

Guerin: "If we had kept the same portfolio as at the end of 2019, we would have 13% worse off. The portfolio is 91% the same but has been rebalanced. The rebalancing on the downside has actually enhanced performance."

16:24 Keynote ETF innovation: Where to go from here?

Guerin: "This reminds me of one of my favourite sayings. Rules enable action in the face of fear and uncertainty and exuberance. These emotions correlate with all the movements we've seen in the market around the pandemic, the US election, the vaccine etc."

16:22 Keynote ETF innovation: Where to go from here?

Guerin: "Rules-based investing helps you help yourself. It tackles overconfidence, under reaction, loss aversion etc."

16:20 Keynote ETF innovation: Where to go from here?

Guerin: "We always get asked about value or growth. But we actually think value and growth are going to move pretty well together."

16:17 Keynote ETF innovation: Where to go from here?

Guerin: "Over 12 months the value index wasn't up nearly as high as value as a factor."

16:15 Keynote ETF innovation: Where to go from here?

Guerin: "In one of the most robust value rallies ever, growth stocks have done well."

16:12 Keynote ETF innovation: Where to go from here?

Guerin: "In markets we have been getting a harsh re-education in beta."

16:10 Keynote ETF innovation: Where to go from here?

We're back with our next keynote speaker, Gregg Guerin, Senior Product Specialist at First Trust.

15:40 Fixed income ETFs: Time for rapid growth?

Another interesting panel discussion, specifically looking at how fixed income ETFs are developing. These surprised many critics and held up last year, now they are demanding a more important role in many investors' portfolios. The panellists discussed the trends they are seeing in terms of product development, commenting that more needs to be done in terms of integrating ESG criteria and defining 'factor-based' approaches.

We'll be back at 16:10 for our next keynote speaker.

15:40 Fixed income ETFs: Time for rapid growth?

Nutland: "Generally, factor investing in bonds is not as well defined as it is in equities."

15:37 Fixed income ETFs: Time for rapid growth?

Backreedy: "How does someone start rating the 'G' on a bond? That is pretty tough to do. Rating agencies will give a credit rating, but when it comes to ESG more could be done. I think there is already work being done on creating a sovereign bond index with ESG ratings integrated, but there is still a lot to be done."

15:34 Fixed income ETFs: Time for rapid growth?

Bauer: "I would love to see much more in government bond ESG ETF innovation, I don't think there is enough there yet. In particular, it would be great if more was to target the 'S' and 'G' credentials." 

15:29 Fixed income ETFs: Time for rapid growth?

Nutland: "I use ETFs for all my fixed income exposure, the currency hedged options are very helpful. But I would say paying extra bps for that currency hedge on a product is not ideal."

15:26 Fixed income ETFs: Time for rapid growth?

Nutland: "The 60/40 model has been a fantastic model for a long time but its fair to say returns will likely be lower for some time, but that is not just to do with bonds. Bonds are still going to give good diversification benefits."

15:22 Fixed income ETFs: Time for rapid growth?

Bauer: "In Europe, we are starting to see financial advisers come around to using ETFs. They wrongly used to think of them as risky."

15:21 Fixed income ETFs: Time for rapid growth?

Bauer: "If you think of model portfolios, you have no way of FX hedging the portfolio outside of the funds you are using. It is nice to have currency hedged ETFs available for that reason."

15:19 Fixed income ETFs: Time for rapid growth?

Nutland: "Generally I prefer ETFs because they externalise the transaction cost, whereas with a mutual fund its borne by the fund. But in reality, if you have to sell, mutual funds could work better."

15:17 Fixed income ETFs: Time for rapid growth?

Nutland: "If in March 2020 you wanted to sell some corporate bonds, you were better doing it with a mutual fund. If you wanted to buy, you were better to do it with an ETF. This raises the issue of whether swing factor price adjustments of mutual funds was accurate."

15:14 Fixed income ETFs: Time for rapid growth?

Backreedy: "We use ETFs as building blocks, and we didn't have any problems with this last year. However a lack of transparency and off-exchange trading caused some problems in the fixed income space."

15:11 Fixed income ETFs: Time for rapid growth?

Bauer: "Fixed income ETFs displayed resilience last year. After that, I think adoption of these strategies will increase."

15:08 Fixed income ETFs: Time for rapid growth?

Next up, we have put together a panel of experts to offer further insights on what's next for fixed income ETFs. Joining moderator Monika Dutt, head of EMEA Passive Strategies Research at Morningstar, is: 

Irene Bauer, CIO, Twenty20 Investments

Raymond Backreedy, CIO, Sparrows Capital

Wayne Nutland, Head of Managed Index Solutions, Premier Miton Investors

15:05 ESG ETFs: Investigating the sustainable boom

Another very interesting panel discussion. With the ESG ETF space continuing to grow and rapidly evolve, our panellists discussed how nuances were beginning to emerge and the existence of different approaches to ESG are facing them with both challenges and opportunities. For one, the emergence of thematic ETFs has become an area of interest and offers a novel way to access exciting themes. At the same time, there is still room for innovation in areas such as fixed income ESG ETFs. 

14:59 ESG ETFs: Investigating the sustainable boom

Jordan: "ESG could become core as nearly every investment management firm is realising they need to integrate it in some shape and fashion. However, there are a range of approaches to this type of investment. There are a whole host of different ways to invest." 

14:55 ESG ETFs: Investigating the sustainable boom

Jordan: "Thematics are such an interesting way to play things, especially from the ESG perspective. I have seen some brilliant products out there."

14:54 ESG ETFs: Investigating the sustainable boom

Singh: "Thematic ETFs is a very interesting space right now. A lot of investment pledges [from President Biden] have been announced in many of the clean and emerging technologies that thematic ETFs target, and this will drive flows and bring costs down."

14:51 ESG ETFs: Investigating the sustainable boom

Jordan: "Synthetic replication wouldn't totally put me off, as you could argue there are different ways of doing this at a process level. Security lending can actually be a powerful tool in engagement."

14:50 ESG ETFs: Investigating the sustainable boom

Jordan: "Platforms are still a frustration. There are often a lot of restrictions when it comes to trying to manage this kind of product within various types of model."

14:49 ESG ETFs: Investigating the sustainable boom

Jordan: "Some providers have large active teams which can do that engagement, while others will face a challenge in terms of how much they can spend on bringing about change in companies."

14:48 ESG ETFs: Investigating the sustainable boom

Singh: "A challenge of the past was there were not enough products in fixed income. This is rapidly changing now and we are seeing the green bond space becoming more liquid. The 'greenium' being paid is increasing, which tell us about what is happening in terms of demand."

14:44 ESG ETFs: Investigating the sustainable boom

Venäläinen: "We are increasingly looking at engagement. Voting is one part of it. We look at the active engagement between investor and company, how opinions are put across and change encouraged."

14:41 ESG ETFs: Investigating the sustainable boom

Jordan: "There are some providers out there that can do divestment but finding out what levers the provider can pull to bring about change in engagement is instrumental."

14:40 ESG ETFs: Investigating the sustainable boom

Jordan: "There has been a fantastic evolution in the sector. It's not just negatively screening anymore. There are so many things to look at, including the ESG strengths of the provider."

14:39 ESG ETFs: Investigating the sustainable boom

Singh: "Screening is very important but engaging can be more productive in the long term."

14:38 ESG ETFs: Investigating the sustainable boom

Singh: "We consider several aspects when choosing ESG ETFs. From the transparency, to the intentions of the launch and also how ESG is integrated into the investment process of the provider."

14:33 ESG ETFs: Investigating the sustainable boom

It's now time for our next panel discussion. Joining editor Tom Eckett is:

Juha Venäläinen, Senior Portfolio Manager, Cross Asset Allocation, Ilmarinen

Paris Jordan, Multi-asset Analyst, Waverton Investment Management

AJ Singh, Sustainable Investing Strategist, Quintet Private Bank

14:00 Keynote ESG: The catalyst for growth of fixed income ETFs

A very illuminating keynote talk from Matthieu Guignard, Global Head of Product Development and Capital Markets, ETF, Indexing and Smart Beta at Amundi. He discussed the growth of fixed income ETFs as an increasingly popular strategy for ESG investors. Critics may be arguing this lacks the corporate stewardship benefits of equity investing, but Guignard explained how pressure can still be applied by bond holders to bring about positive change. 

14:29 Keynote ESG: The catalyst for growth of fixed income ETFs

Guignard: "I see further space for growth in fixed income ESG products. There is still strong growth to come in that market, because generally speaking the fixed income segment generally - not just ESG specialised products - is likely to grow."

14:26 Keynote ESG: The catalyst for growth of fixed income ETFs

Guignard: "When it comes to ESG, the active vs passive debate is not very different to how we traditionally know it. The advantages of passive are the same. But in many cases a passive approach would bring very systematic performance, lower fees and - in the end - transparency criteria that is published at the end of each trading day."

14:14 Keynote ESG: The catalyst for growth of fixed income ETFs

Guignard: "Rating agencies have made great progress to integrate non-financial data in their work, for both bonds and equities."

14:14 Keynote ESG: The catalyst for growth of fixed income ETFs

Guignard: "As long as we are invested in a bond or a stock, we can carry on putting pressure on that issuer by still dialoguing with that company. It is even more powerful to stay invested, because once you divest you lose all dialogue. So no more pressure or engagement."

14:12 Keynote ESG: The catalyst for growth of fixed income ETFs

Guignard: "One can think ESG is more related to equities. But the same strategies can be applied across both equities and fixed income."

14:09 Keynote ESG: The catalyst for growth of fixed income ETFs

Guignard: "The trend of investors' appetite for ESG ETFs has accelerated. The situation is a bit different between equity and fixed income, for equity almost half the flows in Europe have been into ESG. But for fixed income it is 100% into ESG."

14:05 Keynote ESG: The catalyst for growth of fixed income ETFs

Guignard: "SFDR is a very positive impact. By defining standards and classifying products into different categories, this has defined a clear setup for clients who are now making their choice."

14:01 Keynote ESG: The catalyst for growth of fixed income ETFs

Guignard: "Regulation is a driver for change and many pension funds have moved to ESG as a result."

14:00 Keynote ESG: The catalyst for growth of fixed income ETFs

Welcome back! Next up we have a keynote talk from Matthieu Guignard, Global Head of Product Development and Capital Markets, ETF, Indexing and Smart Beta at Amundi

12:12 The Big Interview: Navigating China for fund selectors

A fascinating interview with George Magnus, Research Associate of the China Centre at Oxford University. An expert in China, he talked to our founder David Stevenson about the realities of investing in such a unique country. Transparency is still a major challenge and investors have to be clear about how they access this (in particular, accessing this theme by proxy could be an easier option for some). He also discussed his opinion of China's ambitious recent commitment to climate change, and how likely this is of materialising as an investible theme, and touched upon the geopolitical tensions that global investors simply cannot ignore. 

12:08 The Big Interview: Navigating China for fund selectors

Magnus: "I think China are quite serious about decarbonisation, with a strong sense it is something they have to be on the right side of. I am sceptical about two things. First, motivation. They have highjacked leadership of this at a time when US was going into the opposite direction. And second, I am sceptical about the current dependency on coal. It is still much more intense than they would have us believe."

12:05 The Big Interview: Navigating China for fund selectors

Magnus: "It's anomalous really that with all these tensions, China is actually welcoming foreign financial services firms to its shores."

12:03 The Big Interview: Navigating China for fund selectors

Magnus: "We have to be aware of China's demographics. It is aging quickly, probably quicker than it expected. However this is a glacial phenomenon and not something investors have to immediately worry about. Labour forces will only fall by around 1% a year."

12:01 The Big Interview: Navigating China for fund selectors

Magnus: "The danger of conflict with China and Taiwan, and by extension the US, has never been as high as I can remember it. However, none of the [steps Taiwan would have to take to instigate war with China] seem very likely. Having said that, you cannot dismiss this as pure fantasy."

11:58 The Big Interview: Navigating China for fund selectors

Magnus: "Transparency is still a problem. China has been increasingly clamping down on private entrepreneurs, culminating in the cancellation of the Ant Group IPO. The issue of transparency could become very problematic. Therefore, the idea of investing in China by proxy has a lot going for it."

11:52 The Big Interview: Navigating China for fund selectors

Magnus: "Only 30% of China's labour force has completed high school. That's not very high for a superpower that wants to compete on innovative technology. As a country it does not score as well as many middle-income countries. We should be careful to calibrate what China is good at and what it isn't."

11:51 The Big Interview: Navigating China for fund selectors

Magnus: "A former industry minister said China is a great manufacturing power, but will not be a sophisticated manufacturing power for the next 30 years. He was talking about the fact China is still learning and will make mistakes along the way."

11:47 The Big Interview: Navigating China for fund selectors

Magnus: "There is no singular index that is a catchall for Chinese data."

11:45 The Big Interview: Navigating China for fund selectors

Magnus: "The GDP numbers from China are not reliable. In China GDP starts off life as a target and if the government does not think it will be met, local authorities ramp up spending in order to meet the target. When you do that you embed uncommercial output in the GDP. However, it is recorded as GDP."

11:43 The Big Interview: Navigating China for fund selectors

It's now time for our first big interview. George Magnus, Research Associate of the China Centre at Oxford University, talks to our founder David Stevenson about the challenge China is posing fund selectors. 

11:37 Fund selector panel: What are the big risks facing markets?

Another great panel discussion, this time covering the risks we still face in markets. The world economy is starting to recover from COVID-19 but the long-term impact of stimulus packages, and their impact on consumer spending, is something to keep an eye on according to our panellists. In particular, the impacts inflation is having on value and growth stocks cannot be ignored. 

11:37 Fund selector panel: What are the big risks facing markets?

Chua: "Deglobalisation is of course a risk. But like anything with politics, it could go away and change quickly."

11:37 Fund selector panel: What are the big risks facing markets?

Assimakos: "China is too big to ignore. One has to be careful what kind of China they invest in. New China? Old China? Are you investing in companies that are still sailing too close to the wind when it comes to the Chinese government? You need to be a little bit careful there."

11:24 Fund selector panel: What are the big risks facing markets?

Assimakos: "We do anticipate value to outperform growth in the next few months. After then we could see growth stocks recover after the relief of vaccines start to fade, and we realise the economy needs fixing."

11:19 Fund selector panel: What are the big risks facing markets?

Assimakos: "We have to be aware of the risk that we are in a fragile world. Everything is effectively a bubble, it all feeds off low-cost money. If you keep borrowing from the future and bringing growth forward, you might find there is not much growth left in the future." 

11:14 Fund selector panel: What are the big risks facing markets?

Chua: "The path to potential 'Japanification' for the US and Europe has probably increased in likelihood at the margins."

11:12 Fund selector panel: What are the big risks facing markets?

Assimakos: "The bigger longer term risk is the Fed doesn't do enough and leaves emergency measures in place. The relationship between debt, spending, tax and all of things is being reassessed in this new environment." 

11:08 Fund selector panel: What are the big risks facing markets?

Villamin: "The Fed has a hard job of it. They can't tighten too much, but at the same time they can't let things go too far. They are trying to walk a very tight line. They say quite a lot, but if you look at the data they have been draining liquidity already. That tells us about where they are likely to go. I think they'd like to rein things in."

11:08 Fund selector panel: What are the big risks facing markets?

Chua: "The path from here [in terms of inflation] is far and wide, it's going to be a volatile period. We think it is a temporary, transitory thing but of course with inflation things move very slowly."

11:05 Fund selector panel: What are the big risks facing markets?

Villamin: "We are in the early stages of a recovery, but we think we will be moving into a more mature stage of that recovery in the next few months."

11:05 Fund selector panel: Inflation, central banks and black swans: What are the big risks facing markets?

In our next fund selector panel, editor Tom Eckett will speak to Norman Villamin, CIO Wealth Management at Union Bancaire Priveé, Evangelos Assimakos, Investment Director at Rathbones, and Francis Chua, Fund Manager at Legal & General Investment Management.

10:35 In the hotseat: ETF closures and what they mean for investors

Great insight as always from Detlef Glow, Head of Lipper EMEA Research at the London Stock Exchange, who talked about the trends he is seeing among European ETF providers and how they are dealing with asset raising demands. In particular, he anticipates greater cost competition as a result of the Lyxor Amundi deal.

We now have a short break but we'll be back at 11:05 for our next panel session: Fund selector panel: Inflation, central banks and black swans: What are the big risks facing markets?

10:33 In the hotseat: ETF closures and what they mean for investors

Glow: "An investor should analyse the tracking quality of an ETF. Look at the tracking difference to get an idea of outperformance and underperformance. One needs to remember the performance expectation of an ETF is the index minus fees."

10:31 In the hotseat: ETF closures and what they mean for investors

Glow: "On the overall TERs we see there is still room for improvement, and I can imagine Amundi putting more pressure on their competitors with regards to pricing."

10:30 In the hotseat: ETF closures and what they mean for investors

Glow: "[With the Lyxor Amundi deal] it seems to make sense, just from the other names that were around. You will have a lot of economies of scale because Amundi will become the second largest ETF provider in Europe. The question is, can XTrackers close that gap and catch up? There is still a huge overlap of product range between them."

10:25 In the hotseat: ETF closures and what they mean for investors

Glow: "In our research we found that a given ETF hasn't reached £100m, you might see it at a greater risk of closure. How long with a provider keen a non-profitable product going? Having said that, some ETFs are not designed for having large amounts of assets."

10:23 In the hotseat: ETF closures and what they mean for investors

Our editor Tom Eckett is now talking with Detlef Glow, Head of Lipper EMEA Research, London Stock Exchange

10:23 ETF selection: What makes a good ETF

Our first poll from today, with some very interesting results. Over half of our audience find total cost of ownership as the biggest factor

 

10:15 ETF selection: What makes a good ETF

A great first panel session in today's schedule, covering the challenges and considerations a growing market is facing fund selectors with 

10:15 ETF selection: What makes a good ETF

Ashe: "An area of fixed income ETFs that could be improved is China, it's a huge market but relatively few products are currently covering that space."

10:15 ETF selection: What makes a good ETF

Rozemuller: "There is no way around it. Not having an ESG offering is ironically the niche, today."

10:13 ETF selection: What makes a good ETF

Quintanal: "We are currently developing our own ESG proposition. Some business models have been challenged, others boosted. In terms of the challenges we have encountered, is an overlap of underlying instruments in ESG ETFs."

10:08 ETF selection: What makes a good ETF?

Rozemuller: "All our products are physical. There may be one reason to go synthetic, if you simply cannot get the exposure with the physical route like with commodity investing."

10:04 ETF selection: What makes a good ETF?

Quintanal: "We prefer physical ETFs mainly because of their simplicity, while synthetic strategies can be harder for investors to understand. It also helps us avoid counterparty risk."

10:00 ETF selection: What makes a good ETF?

Rozemuller: "If you go rules-based and passive, it's a little strange if you follow a market cap weighted index which could be considered an active management approach."

09:58 ETF selection: What makes a good ETF?

Quintanal: "With thematic ETFs, the issue can be there are not enough publicly listed companies to invest in."

09:56 ETF selection: What makes a good ETF?

Ashe: "Investors need to ask themselves three questions when ascertaining liquidity. How positive do they feel about the sector they are targeting? Do the indices accurately represent the sector? And do they believe the ETFs adequately track those? If the answer to all three is 'yes' they should be ok."

09:52 ETF selection: What makes a good ETF?

Rozemuller: "The most important aspects are cost, liquidity and, with more thematic ETFs, it's important to look at exposure you offer and if it does what it is supposed to do. With thematic ETFs there are differences with how different providers approach this."

09:48 ETF selection: What makes a good ETF?

Hosted by editor Tom Eckett, we're now going to hear from an expert panel on what makes a good ETF. Featuring:

Brendan Ashe, Head of ETFs, HSBC
Ana Quintanal, Investment Manager, ETFmatic
Martijin Rozemuller, Head of Europe, VanEck

09:45 Opening keynote: The rise (and possible?) fall of ESG ETFs

A fascinating talk with Vincent Deluard, Director of Global Macro Strategy of StoneX Group, who discussed the potential fallout from the growth of ESG investing in ETFs. In particular, he flagged concerns about the concentration of stocks this trend was developing and whether ESG, as a strategy, was the best way to bring about positive societal and environmental change. 

09:37 Opening keynote: The rise (and possible?) fall of ESG ETFs

Deluard: "Concentration is happening everywhere, in all kinds of industries. Most businesses have this wide competitive moat around them, which is great for shareholders, but as a society the less competition you have, the less dynamism you have. This also sets the stage for inflation. You could say the ETF industry is contributing to this, but not intentionally."

09:31 Opening keynote: The rise (and possible?) fall of ESG ETFs

Deluard: "Are we doing things right by piling into the same number of stocks in Silicon Valley? When you are chasing a small number of mega stocks, it does not work."

09:30 Opening keynote: The rise (and possible?) fall of ESG ETFs

Deluard: " There is a big tech, large growth ETF I would identify as a crowded trade - we will not name it but it has been suffering recently. This is where the big successes have been and it is slowly deflating. I call it 'growth at any cost'."

09:28 Opening keynote: The rise (and possible?) fall of ESG ETFs

Deluard: "Because humans are humans, and a twisted animal, we are creative when it comes to doing bad things. So a check box approach does not work with ESG."

09:27 Opening keynote: The rise (and possible?) fall of ESG ETFs

Deluard: "At the core, ESG is an active strategy. Using the power of my money and time to impact change, like an active shareholder. None of this by definition is done by passive ESG ETFs. If anything, a lot of ETFs actually loan their voting rights to others."

09:26 Opening keynote: The rise (and possible?) fall of ESG ETFs

Deluard: "ESG in a passive format is an oxymoron. If you just track an index, the most you are going to do is 'tilt' and potentially influence behaviour a little bit."

09:15 Opening keynote: The rise (and possible?) fall of ESG ETFs

Now it's time to hear from our opening keynote speaker, Vincent Deluard, Director of Global Macro Strategy, StoneX Group

09:05 Breakfast workshop 

Very interesting opening keynote from Athanasios Psarofagis, ETF analyst at Bloomberg Intelligence. Flows are growing in European ETFs, but interestingly usage is also spreading as the market develops. 

8:48 Breakfast workshop 

Psarofagis: "This year, fixed income and commodities are not taking a lot when it comes to which asset classes are attracting inflows. Equities are taking the overwhelming amount, more than I have ever seen."

8:46 Breakfast workshop 

Psarofagis: "You are seeing more comfortability with the ETF wrapper. Usage continues to be very strong, which is telling. Some of this could also be retail coming into the market."

8:45 Breakfast workshop 

Psarofagis: "82% of mutual fund managers are concerned about ETFs for the growth of their business. Fifteen years ago this was very different."

8:44 Breakfast workshop 

Psarofagis: "Usage is increasing, it's not just a few products taking flows."

8:40 Breakfast workshop 
"We are on record pace [of European ETF growth] and not even halfway through the year. The pace is very healthy"

Athanasios Psarofagis, ETF analyst, Bloomberg Intelligence