Asset Servicing

The European ETF market grew in January by a record 46.9 billion euro. In the shadow of that growth, a price war is taking place: mainstream ETFs are now being offered with an expense ratio of 0.03 percent. Will Europe soon welcome the “free” ETF, as in the US?

Investments in private markets are still characterized by limited information and imperfect transparency, particularly when compared with public assets. Asset managers increasingly see economic value in addressing that gap, turning greater transparency into a business model in its own right.

This week’s overview of industry appointments in Luxembourg and elsewhere in Europe.

As European regulators reassess what Ucits funds should be allowed to hold, Luxembourg’s fund industry is drawing a clear red line: do not compromise a global brand that already works. The Association of the Luxembourg Fund Industry cautioned that proposals to tighten eligibility rules could push the framework backwards rather than modernise it.

The already downward-trending stock prices of major US private credit firms took another hit this month amid the markdown of the software sector and concerns about AI. While executives are trying to contain those concerns, analysts say market participants may already be pricing in risks that could affect clients later.

The election result in Japan was historic. For the first time since World War II, one party secured a two-thirds majority in parliament. Prime Minister Takaichi can now implement her plans without the compromises that have so often paralyzed Japanese politics. The stock markets responded positively: prices rose and records were broken. This is the first effect of the coming reflation on Japan’s financial markets.

Rising budget deficits have caused government bonds to lose much of their appeal as a safe haven for investors. High-quality corporate bonds have subsequently moved up the ranks. Has the rally run its course? Samuel Gruen, fixed income specialist at Rothschild & Co Asset Management, examined the European market from a historical perspective.

Despite a steady increase in the number of European long-term investment funds over the last two years, concerns around gold-plating continue to persist, with France attempting to exclude non-domestic Eltifs from French life insurance products. For Alfi CEO Serge Weyland, “this is against all the EU laws.”

With the Dutch House of Representatives (Tweede Kamerlid) passing the Actual Return Box 3 Act last week, the Netherlands will introduce “paper gains” as a basis for taxation starting in 2028. That is entirely unique in Europe. The patchwork of solutions Europe has devised for this tax will therefore gain a new addition.

Here in Milan, during the Olympic Games, only one thing matters: winning. In geopolitics, the battle for victory has now been pushed to an unprecedented level. But whether we in rustic Europe are truly aware of that, I wonder.