be your guide to the market and exchange traded funds. everything you need to know about the funds and the flows. matt: bumper inflows. eurosng past one trillion as fees continue to fall. we will discuss are the industry is headed in 2021. a deal is done but not on london's financial services. we will ask if europe's most important etf hub will continue to rise and prosper outside the e.u. and as investors continue to try to catch crypto from a, will regulation dampen the bitcoin party. we just got a new record, more

than 28,500 euros. pastean etf assets soared the trillion euros in 2020, cash flowed into equity funds on vaccine optimism. intelligenceberg wreck -- globally, bloomberg intelligence ranges trade-weighted options over $1 trillion in 2021. let's go to paul from newton in management -- from newton management. see it playing out next year? paul: well, i think the positive development here is that the active atf market is growing, and that is something which should be to the benefit of active managers. for pasteen the news investment, but actually etf's will be a growing market, and that means more will be

available for investors and that .ould only be a good thing also the fact that the asset, arepoint at markets respected on a more discerning basis. matt: we will get more from paul markham in a moment. i want to get to brexit. agreed aand u.k. have trade deal, but it is a trade deal that does not include services, leaving the city of london to face the new year with more uncertainty. let's get some analysis with marcus ashworth. how has this uncertainty affected london's etf industry? : it has certainly help back the growth. the further financial conduct authority changes are going to

make costs more visible come which is only going to benefit further etf's. that aside, brexit has held beth the growth -- held back the growth because of uncertainty. it sort of low-cost, short-term hedge passes just building market exposure and taking on and off without really a long-term commitment to perhaps from a retail point of view. again, we see a vanguard to kind of take on the big one here, which is blackrock, into the retail market. i think that will spill over into helping etf's. once brexit is sorted out as we look like it is going to be, it is only going to take away that uncertainty. that can only be good, specifically for u.k. exposure. outside domestic investor, you want to get

exposure to the u.k. what is the quickest, easiest way to do it? logically, it is going to be etf's. people do not want to take the brexit basket risk. matt: what are the main brexit related challenges facing the services sector?is marcus: the e.u. understandably wants to take back control of its own financial services, which it has never really got its act together properly. the u.k. has massive advantages from languages, from its legal code, and indeed from the massive infrastructure. nonetheless, there is a real desire for europe to take control of its own markets. inflow, and ono a regulatory basis, europe is going to put some firmer rules in place to encourage investment have to do euro trades

in europe, european stocks and bonds. that will take some time to get through. we know already the derivative side will not be effective until the middle of 2022. i expect with the financial services side agreement, if we get this positive effect from this deal and it sticks and it looks like people on both sides are happy with the way it is going, i think we might get something more substantial -- inial services since march or april. meansadnote, which consultancy services can be solved and they will not be restricted. the other thing is that there will not be cross penalties. just because there is a disagreement on fish, doesn't mean that the you will be able to restrict on finance. aere are good prospects for deal to be done.

rett: i was just going to point out, marcus, -- matt: i was just going to point out, marcus, ab the e.u. takes back its full review of financial services and gets to control of its fishing waters, the u.k. does that make sense? marcus: that is what is called a no deal, and there is a one year ripcord on this. we knowlly speaking, how important it is for the u.k., we are the largest financial services exporter in the world. nonetheless, the e.u. is totally reliant effectively on the city of london for raising finance, and that is going to become more apparent in the next few months. is way within urging of both sides it might help. matt: financial services is pretty important to london, but fishing is super important. marcus ashworth, thanks so much for joining us, from bloomberg

opinion. paul markham is still with us, joking around obviously a little bit there about fishing, but how can you not? what do you expect in terms of the status of the city of london throughout 2021? it is a great question, matt, because we saw the ranks perform quite weakly yesterday, off the lack of inclusion in financial services with the brexit deal. that will be quite close to home because financial services institutions make up the city of london and make up the vast majority of decisions around investment. that is something which will continue to be an overhang. i think what we heard in your previous segment regarding the infrastructure, not only the systems and legal framework, but lawyers, fields,

staff, all of those things take many years to build up, and that is something that london will see quite whately -- quite rightly. the desire to move to other european cities on the path of some european nations is very high, particularly paris. moreovernment wants to see of that business on their doorsteps. so something that will pan out over several years, the desire to get something done quite quickly indicates the deal will be strong on the part of the u.k. government. the e.u. is maybe a bit more demanding regarded how that prediction is included. the ftse is still down 12% year to date as we see new records everywhere in the u.s. and even here in germany. what is he going to take to turn that around? paul: i think that -- sorry, can

you repeat the question? take what is it going to to get back to gains on the ftse? we are still down year to date on u.k. stocks, and it is such an international index, people say it will not be affected by brexit, but it seemingly has. the: yes, absolutely, and thing to remember, which is a little bit of a conundrum, is that hundreds and revenues come from that side of the u.k. the effect on the markets with all of that is disappointing. the effect of the breakdown is important. there is a pie waiting for oil, which is a sector that has had many challenges. mining, esg credentials, and

that will be a headwind going forward. we also have a banking sector which has been affected, a brexit beneficiary, if you like. so that has been a tough aspect of it as well. i think we need to see evidence that the u.k. economy firstly is going to not be badly affected by brexit or thrive. then of course we would need to probably see the global economy increase because the u.k. market is very much seen as a bellwether for the global economic situation and outlook as we see it in any given space. global recovery will see the ftse be playing on that one, i would imagine. matt: paul, thank you for joining us. paul markham from newton investment management. coming up, as investors continue -- wech crypto foam a will discuss that next. this is bloomberg. ♪

this is bloomberg etf iq europe, everything you need to know about the funds and the flows. i'm matt miller. point has made all kinds of records lately, crossing the $20,000 mark and then $25,000 just days later. sunday.on in europe, crypto etf's have been taking advantage. simone, what is the scale of the european crypto market? simone: matt, a year ago we were at less than one billion euros

of crypto exchange rated products. now the top four crypto exchange rated products are about -- are worth about 2 billion euros. this of course led by bitcoin tracker eur based in sweden, the largest crypto exchange rated product around the world, but in fact there are six products that all have more than 100 million euros apiece. those are based in switzerland, germany, and in sweden. simone foxman talking to us about the big bitcoin runoff. let's round off an eventful year by hearing from some of our recent guests that gave us their predictions for 2021's investment landscape. thee see investors both on institutional side as well as the wealth management side giving -- needing to have more institutional solutions. the other side, if we look at equities, there are definitely opportunities which are still undervalued. a lot of the movement of the

past year has been on the large-cap stocks, and some of the mid-cap and small-cap opportunities are often not seen with the same kind of lens. there is going to be a lot more focus in the new year on that, and that is where the portfolios that we look at, that is where we see the attention and where some good value can be found. >> it is very clear that what is worked in 2020, have been dramatic investments that have touched software in various ways. cloud computing for example, is up basically 90% year to date, less than a year during a global pandemic, you have a diversified investment strategy of 54 stocks up almost 100% year to date. it is crazy to consider that, that is what we have just seen. going forward, we know that the world is still focused on data, generating data, collecting data, regulated data. it is in the news every day. things that focus on cybersecurity and privacy, we

think they are going to be very interesting, especially with the potential for new regulations along all this continued collection of data. we see artificial intelligence as the tool kit that allows people to actually make sense of all the data, at least somewhat, that is being collected. what was different between europe and the u.s. is that the flows into value in late in thek became game. us, in the past month -- 2021 might be different. i think the expectation for returns might be lower. the good thing is that bond performance is expected to be lower than that, giving a little positive risk assets equities.

there will be some focus of value to be found. >> another big change is china, chinese bonds. people are looking for yields, and with ftse and bloomberg deciding to put chinese bond into their indices in 20 21, we are seeing significant interest -- in 2021, we are seeing significant interest in those products. with 645 million dollars in launch, it got to over $1 billion in size in two weeks. emerging markets looking for yields, you mentioned smart data. -- smart beta. we are seeing a move away from smart beta especially as companies pay a less dividends. movee seeing investors more to esg's, more to thematics , and more to countries that they think will benefit from post pandemic environments. >> the etf industry is only going to continue to grow. we have seen that trendline continue for quite a number of years now, and as more investors are looking for simple

investment solutions, diversified building blocks, that is really highlighting the fact that the etf industry is going to continue to grow not only just in the equity space but very much in the fixed income space as well. variants for next year and for the coming two or three years, there are only 44 fixed use, over 400 overall fixed income etf's. there is a lot of work to be done. we have had about 7.5 million of inflows. it tripled the flow rate into this area. going forward, we can see that we can go higher. >> i do think that etf's will continue to grow. i'm seeing investors in latin america, asia, across europe, using the etf's that are domiciled here, and regulatory changes in brazil, the biggest

america, is an big opening up of that market. we have seen investors in chile -- i think if you look at changes in hong kong and asia, you're seeing a greater adoption of using uses, especially with funds that have change regulations, where the global regulator in hong kong now on the regulate the feeder fund and other primary listings. in seeing increasing use of etf's around the world. of our recent guests looking ahead to the next few months. coming up, etf assets under management in europe topped a trillion euros this year, but which industry players have done best? we will discuss that next. this is bloomberg.

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matt: this is bloomberg etf iq europe, everything you need to know about the funds and the flows. i'm matt miller.

it has been quite a year for news and quite a year for europe's etf market. assets under management in the region topped one trillion euros as cash poured into equity funds on vaccine hopes. but which industry players have done best? let's get more with simone foxman. who is on top this year? it continues to be blackrock's ishares dominating 44% of the market in european atp, and it is not even close. has 10%.player, aws this is a spot where we can see a huge shakeup, because look asset management is for sale. that is the third-largest player

in this space. in europe,tp issuers 16 have not been around for more than four years. there were four new this year. credit suisse managing to amass more than three point 8 billion euros in assets in just that short time. eurose than 3.8 billion in just that short time. fee -- in thef new year. will that continue or will he reverse? simone: it is definitely likely to continue, morphy cuts ahead. 13 -- morphy cuts ahead. ahead. fee cuts a smaller percentage than we have seen in the united states where about 60% of product offer that kind of level of fees. that is partly because of european market is fragmented.

it is nowhere, it is also because a lot of the hot products this year has been the complicated stuff. they leveraged etf's, the thematic etf's that charge higher fees on the -- that charge higher fees. there is a lot of room for consolidation that we talked about, but we have seen this pressure toward low-cost generally around the world, consolidated players, the bigger players. they are the ones who are able to offer the lower fee products. bloomberg intelligence estimated euros, that was that cutof the etf's fees most quickly. that trend could continue as we get larger products. matt: simone, thank you so much for joining us. bloomberg's simone foxman they're talking about the winners and the losers for 2020 and what to expect for 2021.

that is it for this week's bloomberg etf iq europe. we will be big mac -- we will be back with more next wednesday, next year, with more of etf iq europe. this is bloomberg. ♪

>> the u.k. approves the astrazeneca vaccine with the first shots coming monday. follow. is expected to the u.k. with over a billion doses to start to be just your bid. treaty being signed in boris pain -- putting pen to paper later today. and the e.u. in china -- and the e.u. and china are expected to confirm their much-anticipated treaty today which risks upsetting the incoming biden administered in. good morning, this is bloomberg surveillance. i am guy johnson in london. francine lacqua and tom keene have the day off today. let's go to ritika gupta. ritika: mitch