Europe's rapidly developing ETF ecosystem faced numerous hurdles throughout the industry's twentieth anniversary this year and investors, along with the wider industry, were eager to follow the key developments each step of the way.
While fee cuts dominated the headlines in 2019, readers were more interested in what strategies ETF issuers were bringing to market this year.
From multi-asset ETF launches to the impact of April's oil market volatility, here are ETF Stream’s most read stories in 2020.
The most read story of 2020 was Vanguard’s launch of its active multi-asset ETF range in December.
Consisting of Vanguard ETFs, the range consisted of four products varying in equity and fixed income weighting. Each ETF came with a total expense ratio of 0.25%
Following a remarkable year for Tesla, the electric car manufacturer saw its share price climb over 650% over the course of 2020.
Amid this rally, Leverage Shares launched short and leverages Tesla ETPs, enabling investors to double or triple down on returns.
As markets went into recovery after volatility hit in March, many investors saw opportunities to multiply returns through leveraged ETPs which was a popular theme among ETF Stream’s readers this year.
In September, ETF Stream revealed the launch of BlackRock’s synthetic S&P 500 UCITS ETF to sit alongside its $37bn physically-replicating ETF.
The launch followed a growing demand from BlackRock’s clients for swap-based structures in US equities allowing investors to not pay withholding tax on dividends.
Prior to Vanguard’s launch of its multi-asset ETF range later in the year, BlackRock launched Europe’s first ESG multi-asset range comprised of three ETFs of ETFs in September.
The ETFs hold equity weightings of 75%, 51% and 20% with total expense ratios of 0.25%, the same as Vanguard’s range.
The price of oil tanked in March, causing leverage oil ETPs to suffer significant losses overnight. As a result of this, WisdomTree had to shut two of its 3x leveraged oil ETPs for breaching the severe overnight gap event threshold.
The breach meant the swap providers for the two ETPs had the option to close the swaps which they executed.
Following major selloffs over fears of coronavirus at the beginning of 2020, indices tracking Europe’s largest economies, and the ETFs benchmarking them, fell back down to figures last seen 21 years ago if you exclude the dividend payouts.
The UK, France and Germany have had underwhelming returns over the past two decades but have been saved by their regions’ respective dividends which have made them stand out compared to the rest of Europe.
Two months after WisdomTree was forced into shutting two of its oil ETPs, the firm had to close a further eight oil products.
The reason for the closure was the same as before with the swap broker, Shell Trading Switzerland, terminating the agreement.
Following the theme of leveraged products, in July, GraniteShares listed 18 inverse and leveraged US stock ETPs.
Along with Tesla, GraniteShares also launched leveraged ETPs offering exposure to Amazon, Apple, Facebook and Microsoft, to name a few.
Readers were fascinated with WisdomTree’s woes in 2020 as the firm was struck with another overnight gap event in April which caused trading on one of its oil ETPs to be suspended.
This time, the issuer's 3x short oil ETP suffered a loss of 60% when the underlying market climbed 20% which enabled the swap provider to terminate the agreement.
Rounding off the list is an emerging markets feature. In February, ETF Stream asked five fund buyers to reveal their emerging market ETFs of choice when looking to get exposure to the asset class.
The selection included various emerging market exposures including an ex-China ETF as well as a socially responsible ETF.