Nordic ETF Trends 2021

The Nordic ETF Trends 2020 Supplement highlights significant developments in the ETF industry, focusing on the growing importance of ESG (Environmental, Social, and Governance) considerations and the evolving acceptance and use of ETFs among Nordic institutional investors. Despite differing views on ETFs' role, pension funds like Ilmarinen and Varma have actively developed bespoke ESG-focused ETFs, leveraging their flexibility and impact potential. Conversely, some investors still prefer mutual index funds for cost-efficiency and simplicity. The report underscores a turning point in 2020, particularly for fixed income ETFs, which gained recognition as effective trading and liquidity instruments during market turbulence, notably amid the COVID-19 pandemic.

The industry roundtable with representatives from major asset managers revealed strong growth in ESG and thematic ETFs, with ESG products attracting more inflows than traditional ETFs in 2020. Fixed income ETFs also experienced a surge in acceptance, supported by clear price discovery mechanisms during volatile periods. Participants noted regional variations in ETF adoption within the Nordics, with Finland and Denmark showing higher ETF penetration than Sweden. The discussion emphasized ongoing innovation, including the creation of tailored ESG indices and products to meet diverse investor needs, alongside a shift toward using ETFs not only for tactical trading but increasingly as core portfolio holdings.

Notable milestones include the 30th anniversary of global ETFs and the 20th anniversary of European ETFs, alongside record inflows into technology and sustainable sectors. The launch of the first fixed income ETF aligned with the Paris Agreement by Tabula Investment Management exemplifies the drive toward ESG integration in fixed income investing. Market observers predict sustained ETF growth driven by digitalization, regulatory developments like the EU taxonomy, and investor demand for transparent, cost-effective, and socially responsible investment solutions. The supplement showcases Nordic leadership in fostering ETF innovation and ESG integration, reflecting broader global trends toward sustainable and efficient investment vehicles.

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Table of content

Introduction to Nordic ETF Trends 2020

An overview of key developments in the Nordic ETF market during 2020, including ETF anniversaries and a digital roundtable discussion with industry representatives focused on market evolution, ESG, and fixed income ETFs.

Diverging Nordic Investor Opinions on ETFs

Insights from Nordic asset owners on ETF adoption, tactical versus strategic uses, varying regional perspectives, and the evolving role of ETFs in addressing ESG concerns and investment flexibility.

ETF Roundtable 2020: Industry Perspectives on Key Trends

Dialogues with ETF providers discussing the impact of COVID-19 on ETF flows, the rising importance of ESG and thematic ETFs, fixed income ETF acceptance, replication methods, and regional adoption nuances within the Nordics.

ESG as a Major Driver of ETF Flows

Examination of ESG ETF growth, investor education on ESG methodologies, the importance of active ownership and proxy voting, innovation in ESG indices, and the relationship between ESG integration and financial performance.

Impact of Regulation and Future Outlook

Discussion on the forthcoming EU taxonomy’s effect on ETFs, potential challenges for passive strategies, opportunities arising from increased transparency, and the role of ETFs in meeting regulatory demands.

2020: Milestones and Market Highlights

Celebration of the 30th anniversary of the global ETF industry and the 20th anniversary of European ETFs; record inflows into technology and ESG sectors; and key market statistics reflecting provider and product growth.

Launches and Product Innovations in ETFs

Introduction to new equity style ETFs by Morningstar and iShares, the resurgence of Credit Suisse Asset Management’s ETF offerings, and strategic growth drivers identified by industry reports like EY’s market forecasts.

Spotlight on Fixed Income and Climate Aligned ETFs

Presentation of the first passive fixed income ETF aligned with the Paris Agreement by Tabula, highlighting Nordic investor leadership, innovative product development focused on sustainability, and the future direction of fixed income ETFs.

Advancements in Sustainable ETF Solutions by UBS

Review of UBS’s decade-long commitment to sustainable ETFs, enhanced ESG benchmarks incorporating climate change exclusions, and the performance and risk-return improvements of their sustainable ETF range.

About Tell Media Group and Publishing Information

Contact details, editorial and production team information, and the publishing schedule for Nordic Fund Selection Journal issues in 2021.