France
Amundi joins robotics ETF frenzy
Amundi is joining the crazed rush to the robotics ETF gold mine, listing a new robotics and AI tracker in Paris. The Amundi STOXX Global Artificial Intelligence UCITS ETF (GOAI) will track an index from Stoxx, which prior to this listing seemed like the only major index provider without a robotics index.
GOAI will track the STOXX AI Global Artificial Intelligence ADTV5 Index, (link here) which is made of companies “that are positively exposed to the increased adoption of AI across industries,” the index factsheet says.
In putting the index together, STOXX teamed up with Yewno, a California based fintech, to pick stocks from the universe of STOXX Developed and Emerging Markets Indices. When picking stocks, the index is particularly interested in patent filings related to AI, which indicate the leading AI innovators as well as AI adopters.
Analysis – ROBO Global: inspiring a million copycats
The proliferation of robotics ETF this year – which have popped up like mushrooms after rain – shows the ETF industry at its best and worst. At its best, in that ETF providers quickly seize on good ideas, compete and drive down prices. But also at its worst.
The robotics ETF craze got going when ROBO Global, a plucky index startup, correctly read the market as wanting a Robotics ETF. Lacking the firepower to start their own issuer, the company partnered with the white labeller ETC in the US and with ETF providers like LGIM in London. The ROBO Global ETF was a huge success in the US and UK, gathering billions in assets. The success inspired copycats and now virtually every major asset manager has one.
Most product innovation in ETF land is done by smaller and medium sized ETF providers. Big ETF issuers have a harder time bringing ground-breaking ideas to market as they are harder to justify internally. Product teams at big asset managers know that any cutting-edge ideas will require sitting in endless hours of internal meetings, justifying your ideas to your colleagues who are also your competitors. It’s for this reason we’ve seen a lot of former top brass at ETF providers leave to start their own ETF providers (or join smaller ones), which presents a clearer runway for new ideas.
But if small and medium sized providers are to keep the product innovation up, they need to be able to do so profitably. Here, big asset managers rolling out quick copycats is arguably unhelpful.
London
iShares GICS communications sector ETF
Like the other major ETF issuers, BlackRock is updating its sector ETF offering to reflect the recent changes to the GICS communications sector. The iShares S&P 500 Communication Sector UCITS ETF (IUCM) will track the S&P 500 Capped 35/20 Communication Services Index (NTR). It will charge 0.15%.
The Invesco XLCS, which listed yesterday, charges 0.14% -- one basis point less. It also tracks a slightly different index: the S&P Select Sector Capped 20% (Communications) Net Total Return Index.
Corporate action
State Street wins Lehman payment
State Street has successfully sued for some kind of settlement regarding the Lehman Brothers collapse. As a result of a law suit, the SPDR S&P Capital Markets ETF (KCE) will receive a total payment of roughly $31,500. The net impact on each ETF will be approximately one cent, State Street indicated in a press release.