Through this collaboration, UK and European retail investors using Trading 212 can now access WisdomTree’s pre-built and carefully constructed core and thematic model portfolios at no additional cost.

The offering includes three core model portfolios and three thematic model portfolios. The core models are designed to suit different risk tolerance levels, allowing investors to choose between conservative, moderate or aggressive portfolios. The thematic models provide multi-thematic exposure to around 15 growth themes and targeted exposure to environmental and tech investment themes.

The six model portfolios are exclusively built with exchange-traded funds (ETFs) and exchange-traded commodities (ETCs) and with an open architecture approach, allowing investors to benefit from the efficiency, flexibility and low cost of the underlying wrappers.

The core portfolios give diversified exposure to equities, bonds and commodities:
• Conservative: Provides diversified exposure across asset classes with a focus on lower risk by allocating a higher exposure to bonds. While the equity exposure is reduced compared to the moderate portfolio, it remains at a meaningful weight to enable a stable level of growth.
• Moderate: Aims to deliver steady growth potential with moderate volatility through a balanced exposure to equity, bonds, and commodities.
• Aggressive: Seeks to maximise long-term growth through higher exposure to equities. Commodities are maintained to counterbalance the higher volatility typical of this investment approach.

Thematic Portfolios:
• Multi-thematic: Delivers diversified exposure to around 15 relevant themes, across three megatrends – Technological Shifts, Environmental Pressures and Demographic & Social Shifts. Includes themes such as artificial intelligence, cybersecurity, renewable energy, decarbonisation, sustainable food, etc.
• Tech: Provides targeted exposure to the subset of tech-focused themes that we find in the Multi-thematic portfolio.
• Environmental: Provides focused exposure to the subset of environmental themes that we find in the Multi-thematic portfolio.

Adrià Beso, head of digital distribution, WisdomTree, said: “For many retail investors, building a robust portfolio from scratch may be too time-consuming and can seem daunting. This is where model portfolios can empower investors, as they remove the need for extensive research and can help allocate to a diversified portfolio which aligns with their investment needs and risk tolerance. Through our new collaboration with Trading 212, we are bringing our institutional expertise to their UK and European investors, helping them to meet their long-term investing goals.”

David Delchev, head of trading and product, Trading 212, added: “The opportunity to provide diversified portfolios powered by ETFs to our customers through an innovative provider like WisdomTree is an exciting development. WisdomTree brings a wealth of institutional knowledge and a track record of building model portfolios for professional investors, that our customers can leverage in their wealth building journey.

“These model portfolios are available on our app as ready-made pies, that are easy to invest in and do not carry any additional ongoing fees outside the fees charged by the underlying ETFs and ETCs comprising the portfolios. We believe that building wealth is a habit, and now our users can automate this with a ready-made pie.”

Trading 212 is a UK commission-free investing app, available to investors in the UK, Europe and Australia Trading 212 with £4bn in client assets and money under administration and 3 million lifetime funded accounts.

The WisdomTree Global Sustainable Equity UCITS ETF will track the price and yield performance, before fees and expenses, of the Solactive WisdomTree Global Sustainable Equity UCITS index.

The index uses the UN Sustainable Development Goals framework to invest in developed market companies with products and services that aim to tackle climate change and social inequalities, promote a circular economy and help protect natural capital.

Negative externalities are avoided through ‘Do No Significant Harm’  and ‘Good Governance’ screens, while excluding investments into controversial business activities.

The WisdomTree strategy aims to limit deviation from a global developed markets equity benchmark, which provides a sustainable alternative for core equity allocations, the statement said.

Alexis Marinof, head of Europe at WisdomTree said: “The new Article 9 ETF provides a differentiated approach to global developed market equities by integrating 11 of the 17 SDGs in the investment process.”

Nicholas MacShane, head of European partnerships at ILIM, said: “Leveraging our expertise in indexation, quantitative research and responsible investing, this collaboration with WisdomTree builds on our reputation for creating customised solutions that help clients meet their sustainability goals.”

The ETF is to list on the London Stock Exchange on 12 June and has a total expense ratio (TER) of 0.29%.

The asset class failed to record a single month of positive flows, with investors pulling £668m in December.

Money market funds, meanwhile, were the only asset class to achieve positive net flows in 2023 as investors put a net £248m into the asset class in December and £4.1bn across the year as a whole.

In December, investors favoured sustainably-labelled funds, which recorded a modest £5m net inflow compared to the £1.7bn that leaked out of non-sustainably labelled strategies.

Sustainable funds recorded £1bn net inflows for the year as a whole, while investors retrieved £27bn from non-sustainably labelled funds.

See also: Revealed: All the winners of the IA Best Practice Adviser Awards

Passive offerings continued to attract cash, pulling in a net £1.9bn in December and £21bn over the year. In contrast, active managers were hit with a £3.9bn outflow in the month and £46.7bn in 2023 as a whole.

This was mirrored in the flows recorded by individual fund groups. Passive providers such as BlackRock (£6.5bn), Legal & General (£2.8bn) and Vanguard (£2.9bn) all recorded strong inflows, while active managers such as Royal London (£8.6bn) and Baillie Gifford (£7.1bn) suffered outflows in 2023.

The top five strategies for inflows in December were all index funds, with the £10.9bn iShares North American Equity Index fund pulling in £409m.

At the other end of the scale, the £4.8bn iShares Corporate Bond Index saw £536m net outflows in the month, the largest of any single strategy.

This article was written for our sister title Portfolio Adviser

As well as a deferred payment of £2.625m and an earn out provision, capped at £5.25m, which will operate over five years and is subject to a minimum, itself dependent upon certain conditions.

Rize ETF, which was founded in 2019, will be renamed Ark Invest Europe as part of the transaction, and will be positioned as a separate arm of Ark Invest.

The firm’s purchase from UK asset management firm AssetCo, which first bought a 70% stake in the company in 2021, marks the start of Ark’s bid to expand into Europe and the UK.

It will add approximately $452m (£365.8m, €422m) in assets under management to Ark’s $25bn (£20.2bn).

AssetCo will partner with Ark and the new Invest Europe platform to launch several ETFs for River & Mercantile – the active equity management subsidiary of AssetCo.

All 11 Rize ETFs will remain available to investors, according to Ark.

Cathie Wood, CEO, CIO and founder of Ark Invest, said: “Today’s acquisition advances Ark Invest’s commitment to offer high-quality thematic investment solutions to a global investor audience, particularly European investors who have not been able to access our products.

“We believe that the European ETF market presents a strong growth opportunity as new and younger investors continue to gain access to ETFs via the growth of digital platforms, and as active ETFs increase market share by meeting the demand for innovative investment exposures.

“We are delighted to welcome the talented Rize ETF team into the Ark family. By merging its passion for thematic and sustainable index investing with Ark’s innovative actively managed approach centred on disruptive innovation, we can offer our clients a more diverse array of investment options to invest in the future.”

Co-founder Forbes said: “The acquisition offers Ark an entry into the European ETF market, capitalising on our expertise and track record in building multiple European ETF businesses.

“Leveraging Ark’s global network and our expertise in European distribution, we aim to strengthen our collective global presence. This initiative signifies not just business growth, but a collaborative exchange of global asset management best practices, insights, and tactics.”

Dublin-domiciled Rize ETF was first founded by Anthony Martin, Jason Kennard, Rahul Bushan and Stuart Forbes in 2019. The group has previously founded ETF Securities and sold it to WisdomTree, and built the European ETF business for Legal & General.

For more insight on UK wealth management, please click on www.portfolio-adviser.com

But is it true?

The answer is – it depends. First, let’s think about why French residents are not supposed to buy US ETFs. The reason is that in France, the regulatory authorities are watching out for bad actors and they require the all funds sold to European residents provide to their clients a simple document known as a Kiid, which lays out in a few pages the risks and returns of the proposed investment.

This to me makes a lot more sense than the American way where investors receive a prospectus filled with legalese, which nobody reads anyway. US providers of ETFs have so far been unwilling to provide such a document to European investors. One reason is because the regulator in the US, the SEC, prohibits the presentation of “forward” returns. So, it the ETF provides information to one regulator, it finds itself in violation of the other.

The question is whether there is a work-around to this, and it turns out that there is. Remember that European regulators are concerned about protection of unsophisticated investors, so if someone is considered a “professional investor”, then they can opt out of the regulation and indeed buy US ETFs without the required disclosures. Now a professional investor may sound scary, but the regulations define this person as follows.

A retail client who has a portfolio valued at least €500,000 (£439,000, $529,000) in liquid assets, performance of transactions of more than €600 per transaction on financial instruments, with at least 10 such transactions per quarter on average over the past four quarters. And finally, an adequate assessment by the brokerage firm of the client’s competence, experience and knowledge in order to obtain reasonable assurance that the client is in a position to take investment decisions and understand the risks incurred. Let us take a look at these requirements.

Requirements

First, the value of the portfolio is easy to understand. This €500,000 does not have to be put into an investment account with a brokerage firm, you just need to provide statements to prove that you have this amount in your net worth. In other words, if you have money in the bank, this counts. The thinking must be along the lines of, if you can accumulate €500,000 in assets, you must have some level of sophistication, although this is not necessarily the case.

Second, you must have made at least 10 “transactions” or trades within a three-month period, with a value of at least €600. This may seems complicated, but it isn’t. 10 trades in three months, means three-or-four trades a month. Remember that once you are considered a professional investor, you don’t have to continue to invest in this way. Look at the amount. Six hundred euros is very little for a portfolio valued at more than €500,000. And if you haven’t done this many trades, you could quickly reach this level in no time.

Finally, the brokerage firm must make an assessment of your skills and ability. This is a relatively low hurdle to overcome. If you have never traded stocks or ETFs though, you probably should not try to become defined as a “professional” investor. But for those who do have experience, or are backed by an investment advisor, you can easily accomplish this. In this way, you won’t have to hire a US advisor who tells you that only they can invest in ETFs. Because you can as well…

In conclusion, there is rarely a reason who an investor needs to open an account in the US if they are a resident in Europe. While not all investors will qualify as “professional investors”, there are plenty of ways to invest.

This article was written for International Adviser by Robert Levitt, founder of Levitt Capital Management.