Summary:
The inclusion of global ETFs, specifically the US and Europe, is intended to provide two types of investor insights and that are ultimately pertinent to the Australian ETF market.
Firstly, inflows / outflows data and which clearly provides a strong signal regarding investor sentiment regarding asset classes, geographic preferences or otherwise, thematic / sector preferences, and finally fear and greed levels.
Secondly, new issue ETFs reflect ‘real-time’ investment theme investor sentiment. i.e, what’s ‘hot’. Additionally, the largest Australian ETF issues are all part of large international entities. And often what ETF is issued in their home markets and, to some degree, subsequently issued in Australia.
ETF News – When Private Markets go Public (apply the correct RGB)
Let’s look at the US, where there was 19 new ETF offerings launched in the past week, each with a distinct value proposition for investors. Detailed below are a few of the launches that we believe are pertinent to Australian investors in terms of market dynamics.
Summit Global Investments launched the SGI Enhanced Market Leaders ETF, an actively managed solution that seeks to deliver enhanced income and capital appreciation by investing in stocks of companies it considers “market leaders”. The portfolio focuses on companies with consistent leadership in earnings, debt, and valuations, and adjusts positions based on changing risk/return profiles and idiosyncratic risks. The fund’s active strategy aims to generate an enhanced yield by an options overlay. Options overlays in the US are the biggest theme going. Called in downside preservation.
VistaShares launched the VistaShares Target 15 USA Quality Income ETF, an actively managed solution offering investors a core equity portfolio of U.S. based companies that exhibit strong quality financial characteristics, while leveraging the experience of the portfolio management team to seek to generate high monthly income. The strategy involves two components: (1) investing in a portfolio of equity securities that exhibit strong quality characteristics defined by high profitability, low earnings variability, and low leverage; and (2) generating income through an options portfolio. Call that Qual and Low Vol over Growth. Factors matter.
PGIM Investments launched the PGIMS&P500MaxBufferETF-May, which seeks to provide investors with returns that match the price return of the SPDR S&P 500 ETF Trust up to a predetermined upside cap while seeking to maximise the downside protection against the SPDR S&P 500 ETF Trust’s losses over the one-year target outcome period. You seeing a theme.
Astoria Portfolio Advisors launched the Astoria Dynamic Core US Fixed Income ETF, an actively managed solution that operates as a ‘fund of funds’ and allocates its assets among underlying US fixed income funds that invest in a variety of fixed income sectors, including, but not limited to, US Treasuries and other debt securities issued by the US Government and its agencies and instrumentalities, corporate bonds, mortgage-backed and asset-backed securities, municipal bonds, high-yield bonds and private credit offerings.
ETF Shares, the emerging new boy on the Australian ETF block, has announced a collaboration with index provider Solactive supporting the launch of three ETFs designed to offer local investors differentiated access to US equities. The firm writes that each ETF benchmarks a distinct Solactive index, delivering focused exposure to American companies characterised by strong financial fundamentals, technological leadership, and transformative innovation.
The three ETFs are the ETFS US Quality ETF, the ETFS US Technology ETF and the ETFS Magnificent 7+ ETF. The firm writes that amid rising uncertainty about the US economic outlook, investors are turning to companies with consistent free cash flow and strong quality fundamentals, as these firms tend to have resilient business models, the ability to self-fund operations, and the financial strength to reward shareholders while navigating market volatility.
Timo Pfeiffer, CMO at Solactive, says “These traits help reduce exposure to interest rate risk and create a more stable investment profile. To capture this, the Solactive United States Quality Cash Flow Index is built from the Solactive GBS United States 500, a liquid and tradable universe of the 500 largest U.S. companies. From this universe, only companies with at least 10 consecutive years of positive free cash flow are considered. These are then ranked by a combined quality score, and the top 100 are selected. Final index weights are determined by each company’s free-float market capitalisation adjusted by its quality score. “For Australian investors, whose domestic equities are largely concentrated in financials and commodities, these three indices offer differentiated exposure to resilient and innovative US sectors, enhancing diversification across both growth and quality dimensions.”
ARK Invest Europe has published its quarterly thematic update detailing Q1 2025 European Thematic ETF Flows. The firm writes that, using data from ETF Book and based on ARK Invest Europe Megatrend Sub Theme Classification, Defence ETFs saw the most net inflows of USD4.184 billion, representing 72 per cent of the total net inflows (USD5.776 billion) to European ETFs in the first quarter of 2025. Investor positioning in defence remains robust. The demand for next-gen military and aerospace technology continues to attract capital, with defence-tech firms benefiting from increased procurement budgets globally. Artificial Intelligence ETFs rank second with USD678 million in net inflows. AI remains the defining technological revolution, with investor appetite fuelled by relentless innovation in large language models, robotics, and autonomous system. Meanwhile, Clean Energy ETFs posted the weakest Q1 2025 net flows, with a loss of USD227 million. The firm writes that capital continues to exit clean energy ETFs as investors adjust to a new global policy landscape. Investors are redirecting capital toward solutions like nuclear energy, grid modernisation, and energy efficiency, which are less dependent on policy incentives. EV and Battery Tech ETFs recorded the second-worst net flows at -USD136 million. Near-term headwinds—ranging from subsidy rollbacks to a cooling demand environment—have weighed on sentiment, the firm writes.
New research covering equity and fund managers across Europe and the US, commissioned by Carne Group, reveals more than 28% of those surveyed believe ETFs are critical to their company’s long-term growth and prospects. A further 69% say they have an important role to play. Respondents expect ETFs to account for even greater proportions of their AUM in the next five years. Looking to 2030, 49% of fund managers believe that between 15% and 20% of their company’s AUM will be held in ETFs.
Global X ETFs Europe has partnered with the index provider STOXX to create a new covered call ETF that will track the performance of the EURO STOXX 50 index while also using derivatives to generate an income stream for investors. The At The Money index which will track the Eurozone blue-chip company benchmark and simultaneously sell call options based on the same index to generate income. Seeing the Theme.
Europe: A busy week in the non-North American ETF launches brings a wide variety of ETF and index launches, featuring covered call strategies, travel, crypto and US equities.
- STOXX and Global X ETFs Europe launch Global X’s EURO STOXX 50 Covered Call UCITS ETF
- US Global Investors launches active travel ETF (TRIP)
- MerQube partners with AuguStar Retirement to develop FIA indices
- CSOP Asset Management launches Hong Kong equity ETF
- Franklin Templeton launches US Mega Cap 100 ETF tracking the Solactive US Mega Cap 100 Select Index
- Melanion Capital’s Bitcoin Equities UCITS ETF listed on Xetra for German investors
- ETF Shares debuts three US-focused strategies in Australia tracking Solactive indices
- Amundi and STOXX collaborate to launch ETF investing in the European defence sector
New ETF Launches- Week of 1 May – 8 May
| Australia |
|---|
| Global X is launching the Artificial Intelligence Infrastructure ETF |
| Europe |
| WisdomTree Enhanced Commodity Carry ETC (CRRY) |
| Janus Henderson Tabula EUR AAA CLO UCITS ETF (EUR) |
| Goldman Sachs Alpha Enhanced US Equity Active UCITS ETF |
| USA |
| Summit Global Investments launched the SGI Enhanced Market Leaders ETF |
| VistaShares launched the VistaShares Target 15 USA Quality Income ETF |
| Regan Capital launched the Regan Fixed Rate MBS ETF |
| Defiance ETFs launched the Defiance Leveraged Long + Income MSTR ETF |
| PGIM Investments launched the PGIMS&P500MaxBufferETF-May |
| Astoria Portfolio Advisors launched the Astoria Dynamic Core US Fixed Income ETF |
| New York Life Investments launched the NYLI MacKay Muni Short Duration ETF |
*Closing price as at end of week. Returns in AUD before fees