ETF Aggregation Services
Basket/Composition Data on Multi-Assets ETFS
Multi-asset ETFs could own cash, equities, various fixed income sub-asset classes, commodities, currencies, and cryptocurrencies. These might be physical or they could be derivatives such as futures or swaps. Extensive data coverage is needed to assemble and accurately price these sorts of baskets, and generate portfolio composition files that can be used to create and redeem ETF shares against their underlying holdings.
Flow Data
ETF inflows and outflows can indicate trends in investor behaviour as well as product launches and closures. ULTUMUS provides a monthly report breaking down assets, inflows and outflows by asset class, (equity, income, commodities, alternative, mixed, crypto, currency, futures); largest providers (eg iShares, Vanguard, SPDR, Invesco, Schwab, Firsttrust, JPMorgan, Dimensional, BMO, Proshares, Wisdomtree, Vaneck, Fidelity. Direxion Shares, GlobalX, GoldmanSachs, American Century, Pacer, Pimco, Flexshares, Xtrackers, Horizon, Ark, Innovator, and Franklin, in the Americas); asset class per provider; and largest ETFs (eg SPY, IVV, VOO, VTI, QQQ, VEA, VTV, IEFA, BND, VUG, AGG, VWO, IWF, IEMG, IJR, VIG, IJH, VXUS, GLD, IWM, VO, VGT, IWD, EFA, BNDX, in the Americas).
There are three separate reports for Americas, Europe and Asia. The reports are available to download every month.
Dividends
Whether ETFs themselves pay out dividends as income or roll them up inside the structure, they need accurate data to handle dividends from their underlying holdings, which can include long or short positions in single stocks, index futures, and other ETFs.
ETF players need to manage the corporate action timetable of announcements, record dates, ex dividend dates and payment dates, and the differences between cash and derivatives’ timing and entitlements to dividends, as well as withholding tax and double tax treaty issues in some cases.
ULTUMUS dividend forecasting provides global dividend forecasts, up to two fiscal years ahead, for over 32,000 securities including ADRs and ETFs. It also includes US tax reporting under the 871(m) rule.
API for Programmatic Consumption
APIs are like the arteries and veins of the body, but instead of delivering blood and oxygen to organs, APIs deliver data to end users. APIs are much more user friendly than legacy flat files, which can cause delays adding data points and customising files. Flexible APIs instantly republish new data from indices or ETFs, incorporate new data into existing models, and do this inside a single API that also flags up changes.
ETF Production
Some asset managers have become ETF factories, churning out hundreds or thousands of their own ETFs within their own in house legal structure. Other asset managers (or simply research houses creating new indices) could act as advisers to a third party managed ETF, which might be a white label ETF platform that handles the legal, regulatory and operational aspects of establishing and running ETFs.
ETF Trading
ETFs trade round the clock for two reasons. They can be listed on multiple exchanges in different time zones. And in some markets such as the US, pre-market and post-market trading on top of exchange opening hours mean that ETFs effectively trade 24 hours a day and 5 days a week.
Given that cryptocurrency markets are open and trading 24/7 on multiple platforms, in theory there should be a weekend market for crypto ETFs, though we have yet to see this.
ETF Distribution
ETF distribution(s) can mean distribution of dividends by an ETF, which we cover elsewhere [ link ].
ETF distribution also means making the product accessible to investors, by listing an ETF on more exchanges, often with more different currency share classes. And in some markets especially in Europe it can be important for the ETF to be a UCITS, or have other labels such as ESG scores. Certain products such as leveraged and inverse ETFS may need a risk flag, restricting them to investors who have signed a risk disclosure document and demonstrated some degree of sophistication in understanding the risks.
A specific focus of ETF distribution is distribution to the retail market, which can be direct to consumer (D2C); through online platforms; via digital advisers and “roboadvisers”, as well as through advisory and wealth managers. The model could be discretionary, where asset managers or platforms make the investment decisions or execution only, where the client makes their own decisions. Advisory can be a half way house between these, where clients receive some advice but make the decision themselves.
