RBC earns ETFs custody mandate from Bristol Gate Capital Partners

RBC I&TS has been appointed custodian of Bristol Gate Capital Partners’ Exchange Traded Funds.

By Jon Watkins

RBC Investor & Treasury Services (RBC I&TS) has been appointed custodian of Bristol Gate Capital Partners’ Exchange Traded Funds which launched in February 2018.

RBC I&TS will also provide fund valuation, administration and tax supporting services. 

“We selected RBC Investor & Treasury Services as a partner because we wanted to simplify our business and use one provider end-to-end to launch and support our ETFs,” said Peter Simmie, co-chief investment officer & chief compliance officer, Bristol Gate Capital Partners.

“Although our firm is 12-years-old, we are new to the ETF business, which made it important to work with a trusted partner like RBC who has a strong technology platform as we launch our dividend growth focused active ETFs.”

Global Custodian wrote earlier this year how the exchange traded fund (ETF) market has emerged as the next battleground for custodians to compete.

State Street has emerged as one of the largest providers of custody services to ETFs. Its advantage can be attributed to the fact that its buy-side arm, State Street Global Advisors (SSGA), is one of the largest issuers of ETFs, and therefore relies on the bank for its asset servicing. However, its client base also includes BlackRock’s iShares, among others.

BNY Mellon’s new chief executive Charles Scharf has specifically highlighted ETFs as a key growth target for its asset servicing business.

“Our asset management and asset servicing flows today are clearing suffering from not having scale in ETFs,” Scharf said on the bank’s third quarter earnings call.

JP Morgan and Citi have also sought to carve themselves a slice of the ETF pie. JP Morgan Asset Management, another significant player in the space with $1.7 trillion in ETF assets under management, also relies on its investment bank for custody and fund services in the US.

The asset class continues to experience rapid growth in 2018. At the start of April, Steve Palmer, head of ETF, HSBC Global Banking and Markets, wrote: “The market for exchange-traded funds (ETF) continues to go from strength to strength.

“In 2017, the broader market for exchange-traded products (ETP) generated global inflows in 2017 of a record $633 billion, up 67% on 2016’s total, bringing total industry assets to more than $4.75 trillion.”