DB - Equity Research-Weekly & Monthly European ETF Market Monitors: European ETF industry gets a fresh start in January-continued

February 10, 2012--ETF month in perspective
2012: A fresh start for the European ETF industry
January brought a very strong start to the year for the global (US, Europe and Asia) ETF industry. ETF assets grew by 8.1% over January 2012, a growth rate that surpassed the overall 2011 year growth rate of 3.1%. Global ETF assets reached $1.4 trillion as of the end of January 2011, up from $1.3 trillion at the end of 2011.
Both the US as well as the European ETF industries grew by 8.2% and 6.5%, reaching asset levels of $1.0 trillion and €221.3 billion respectively. Most of the growth came from rebounding equity markets, however, flows accounted for 2.9% of the growth in the US market and for 1.1% of the growth in the European market (US$ terms). Cash flows for the US market totaled $27.1 billion and €2.4 billion for the European market, for the month of January.

The performance of the European ETF market in the first month of 2012 was sharply different from how it ended the previous year. European ETFs registered outflows of €2.2 billion over December 2011, a decline that was largely driven by equity outflows (€1.8 billion). This situation was reversed in January 2012, with equities contributing €1.5 of net inflows towards the new money that flowed into the European ETF industry.

The January 2012 European ETF industry fresh start was mainly driven by two factors. First, overall market conditions improved somewhat, with the Euro Stoxx 50 delivering gains of 4.3%. Better market conditions helped bring ETF investors out of their shell and allocate money back in the equity market. Second, the European Securities and Markets Authority, ESMA, issued its second consultation on ETFs. ESMA’s publication of its views provided comfort to investors as it gave an indication both about the regulatory body’s future intentions as well as its views with regards to perceived ETF risks.

Overall, the ESMA consultation was deemed to be balanced, avoiding any dramatic changes in the European ETF market, especially those that would put it at odds with how mutual funds operate under UCITS. The consultation provided further evidence that ESMA, through ETFs, which are perceived to be the golden standard in the fund industry, is looking to 'tidy-up' a number of wider fund management industry issues, such as tracking capacity and fund construction, primarily pertaining to total return swaps and securities lending practices .

ETF Industry: The month’s investment trends

The US Market: Flows across the board, from domestic to emerging markets

The US ETF industry registered strong cash flows in the first month of the year totaling $27 billion. Investors favor for risky assets continued in January with equities having the lion’s share in cash inflows ($19.3 billion).

US ETF equity flows were quite diversified, with both domestic as well as emerging markets benefiting. US domestic benchmarked equity ETFs brought inflows of $11.5 billion, while emerging market benchmarked equity ETFs saw inflows of $5.7 billion. Sectors also did well, attracting new money totaling $3.2 billion.

Fixed Income ETFs collected a healthy $7.7 billion in cash inflows; a healthy increase over the $6 billion inflows received in December. Commodity ETVs had a positive month, receiving cash inflows in excess of $1.5 billion which is in sharp contrast to last month’s pattern where commodities registered outflows of $2.7 billion.

For more information about analysis and trends in the US ETF market please refer to our US ETF Market Monthly Review.

The European Market: Emerging Markets main flow growth driver

Equity markets across Europe had a very positive run over the month registering advances across the board: DAX (? 9.5%), CAC (? 4.4%), Euro Stoxx 50 (? 4.3%) and the FTSE 100 Index (? 2.0%). Gold and silver spot prices (US$/oz), also appreciated by 9.8% and 17.6% respectively.

The European ETF industry improved on its poor run in December (outflows of €2.1 billion) and received cash inflows of €2.4 billion in January. Most of the flows went into ETFs tracking equity benchmarks (€1.5 billion) with healthy contributions by other asset classes; Fixed Income ETFs (€412 million), commodities (€331 million) and alternatives (€159 million).

Within equities, emerging markets (EM) benchmarks were back in vogue, collecting cash inflows of €904 million in January. The BRIC countries (Brazil, Russia, India & China) collectively pocketed cash inflows of €365 million while ETFs tracking broad benchmarks like the MSCI EM collected €385 million over the same period. Within ETFs tracking developed markets (DM) benchmarks, a clear divergence was visible: ETFs focused on North American region which includes US & Canada received cash inflows of €672 million while ETFs tracking European benchmarks registered outflows of €663 million. ETFs tracking broader DM benchmarks such as MSCI World received net cash inflows of €107 million over the month of January.

ETFs tracking European sectors registered cash inflows of €171 million in January as compared to outflows of €166 million in the month of December.

Despite the positive equity markets and healthy flows, a hint of bearishness continues to persist as evident from the flows into leveraged and inverse products. ETFs providing inverse and leveraged inverse exposure pocketed inflows of €272 million and €282 million in January respectively. On the other hand ETFs providing leveraged exposure registered cash outflows of €332 million.

Fixed Income ETFs registered cash inflows of €412 million over January as compared to outflows of €404 million in December 2011. ETFs tracking corporate debt issuances and sub-sovereigns collected inflows of €588 million and €117 million respectively. Money market & sovereign ETFs registered outflows of €249 million and €144 million respectively.

Commodity ETPs received cash inflows totaling €498 million in January which is marginally higher than the €198 million received in December 2011. Most of the inflows were into products tracking crude oil (€211 million) and diversified commodity indices (€131 million).

ETP investors approached gold products with caution in January, evident from the inflows totaling €56 million which is significantly lower than the €623 million received in December 2011.

ETF comparatives: Mutual Funds, cash equity turnover

European ETF turnover is 8.0% of the region’s cash equities turnover as of the end of January 2012. The equivalent number for the US market stands at 24.5%.

European ETFs comprised 2.8% of the continent’s mutual fund industry, yet ETF cash flows, €17.7 billion from Jan-Nov 2011, was over 1.4x higher than the corresponding unlisted fund flows (- €44 billion). European unlisted mutual funds registered outflows of close to €138 billion in the months of Aug-Nov 2011. Mutual fund industry data as per the European Fund Management Association (EFAMA).

US ETFs comprised 8.1% of the its mutual fund industry, yet ETF cash flows, $113 billion for 2011, was over 4.7x higher than the corresponding unlisted fund flows ($24 billion). Mutual fund industry data as per the Investment Company Institute (ICI).

To request a copy of the report

Source: Christos Costandinides, European Head of ETF Research & Strategy, Deutsche Bank


Europe ETP News
Trading spiked 550% on platform founded by Brexit backer
June 28, 2016--Co-founder of Hargreaves Lansdown had backed the 'Leave' campaign to the tune of £3.2 million.
read more
Crystal Palace fan wants to make Vanguard a European champion
June 28, 2016--US investment giant is building a UK retail platform that could take it up the league table.
read more
Monday Morning Memo: Review of the European ETF Market, May 2016
June 27, 2016--After a rough start for the year 2016 the assets under management in the European exchange-traded fund (ETF) industry recovered during April (+€8.1 bn) and May (+€9.0 bn) to €454.6 bn. The increase of €9.0 bn for May was mainly driven by the performance of the underlying markets (+€8.7 bn), while net sales contributed only €0.3 bn to the overall growth in assets under management in the ETF segment.
read more
S&P strips Britain of perfect AAA credit rating
June 27, 2016--S&P Global Ratings has cut the UK's top credit grade by two levels after the country voted to leave the European Union last week.
read more
UK Referendum on Membership of the European Union: Questions & Answers
June 24, 2016--The European Commission takes note of the outcome of the UK Referendum.
Now that the UK has voted to leave the European Union, what happens next?
read more
Joint statement by Deutsche Boerse and London Stock Exchange Group
June 24, 2016--Deutsche Börse AG ("Deutsche Börse") and London Stock Exchange Group plc ("LSEG") note the result of the UK Referendum which recorded a majority of votes in favour of leaving the European Union.
read more
EU referendum results live: Brexit wins as Britain votes to leave European Union
June 24, 2016--Britain has voted to leave the European Union, with the Leave campaign securing around 51.8 per cent of the vote.
read more
iShares Fallen Angels High Yield Corporate Bond launched on Xetra
June 23, 2016--ETF provides access to sub-investment grade corporate bonds
A new iShares bond index ETF from BlackRock's product offering has been tradable on Xetra and Börse Frankfurt since Thursday.
Name: iShares Fallen Angels High Yield Corporate Bond UCITS ETF
read more
Russia to issue first international bond in three years
May 23, 2016-- Russia has hired a bank to launch its first international bond since the conflict in Ukraine led to the country being placed under sanctions.
read more
New PowerShares equity index ETF launched on Xetra
June 22, 2016--ETF tracks high-dividend low-volatility companies from emerging markets
A new index fund from the ETF offering issued by PowerShares Global Funds has been tradable on Xetra and Börse Frankfurt.
ETF name: PowerShares FTSE Emerging Markets High Dividend Low Volatility UCITS
read more
First independent Chinese issuer lists ETF on London Stock Exchange
June 21, 2016--Historic fixed income ETF issued by Fullgoal Asset Management
ETF tracks FTSE China Onshore Sovereign and Policy Bank Bond Index
ETF also set to list on Borsa Italiana
read more
Deutsche Boerse to create fintech VC fund
June 21, 2016--Venture capital investments to include post-trade services and big data
read more
Pensions: The slow burn financial crisis
June 20, 2016--A lethal mix of low investment returns, high charges and insufficient contributions.
read more
WisdomTree Broadens Boost Range of Oil ETPs with Cross-Listings on the London Stock Exchange
June 20, 2016--Boost ETP, Europe's award winning, specialist Short and Leverage (S&L) Exchange-Traded Product (ETP) provider today announced it has cross-listed several Oil ETPs, creating a comprehensive suite of products focussed on this important part of the commodity space.
read more
Two new Wisdom Tree smart beta ETFs launched on Xetra
ETFs based on high-dividend stock corporations with high growth and quality factors
June 20, 2016--The new WisdomTree smart beta ETFs enable investors to participate in the performance of stock corporations with the best combined rank of growth and quality factors.
read more
United Kingdom : Financial Sector Assessment Program-Financial System Stability Assessment
June 17, 2016--Summary: Since the last FSAP, the U.K. financial system has put the legacy of the crisis behind it and has become stronger and more resilient. Five years ago, the financial system had stabilized but still faced major residual weaknesses.
read more
Nine new Boost products launched on Xetra
ETCs and ETNs offer access to performance of WTI and Brent oil and S&P 500 VIX and Emerging markets with a leverage factor of up to three
June 17, 2016--Five ETCs and three ETNs from issuer Boost Issuer Plc have been tradable on Xetra and Börse Frankfurt since Friday.
read more
ETF Securities smart beta bond index ETF launched on Xetra
ETF provides access to sovereign bonds of OECD member states/Weighting based on fundamental factors
June 17, 2016--ETF Securities has offered its first smart beta bond index ETF on Xetra and Börse Frankfurt since Friday.
read more
ESMA issues Opinion on inside information disclosure under the Market Abuse Regulation
June 17, 2016--The European Securities and Markets Authority (ESMA) has issued today an Opinion in response to a notification by the European Commission about intended changes on a draft Implementing Technical Standard (ITS) on the disclosure of inside information under the Market Abuse Regulation.
read more
Euro Area: Staff Concluding Statement of the 2016 Article IV Mission
June 16, 2016--The euro area is at a critical juncture. Growing political divisions and Euroscepticism have weakened prospects for collective action, leaving the euro area increasingly vulnerable to a number of risks at a time when there is little policy space.
read more
Official Statistics: Forecasts for the UK economy: June 2016
June 15, 2016--Forecasts for the UK economy is a monthly comparison of independent forecasts.
read more
New db X-trackers bond index ETF on corporate bonds tradable on Xetra
ETF with access to high-yielding bonds
June 15, 2016--A new db x-trackers ETF from the Deutsche Asset Management ETF product family has been tradable in Deutsche Börse's XTF segment via Xetra and Börse Frankfurt since Wednesday.
Name: db x-trackers iBoxx EUR Corporates Yield Plus UCITS ETF (DR)
Asset class: bond index ETF
ISIN: IE00BYPHT736
read more
ESMA publishes annual report 2015
June 15, 2016--The European Securities and Markets Authority (ESMA) has published today its Annual Report for 2015, which describes the key accomplishments by ESMA in 2015.
read more
Communication from the Commission: Fourth Report on Relocation and Resettlement
Fourth report on relocation and resettlement
June 15, 2016--Introduction
The Fourth Report on Relocation and Resettlement provides an updated state of play since the last report of 15 May1 and assesses the actions undertaken by all relevant stakeholders from 13 May 2016 until 14 June (the reporting period) to deliver on the recommendations made to accelerate the implementation of the relocation and resettlement schemes.
read more
Low-cost index launch from Bats takes aim at FTSE, CAC and DAX
June 13, 2016--Bats Europe, the upstart stock exchange that has turned itself into the biggest in Europe in just eight years, is to open a new battle with its established competitors by launching a set of low-cost benchmarks, attacking rivals' lucrative market data business.
read more
WisdomTree brings three more ETPs to the UK
June 13, 2016--WisdomTree has continued a European push with the launch of three more Boost ETPs into the UK.
read more
OECD-European economy is slowly recovering but legacies of the crisis remain and new challenges are emerging
June 9, 2016--The European economy is gradually recovering but further policy action will be required to address unresolved legacies of the global economic crisis that are weighing on growth and major new concerns that have emerged, according to two new OECD reports.
read more
WisdomTree Builds Out UCITS ETF Platform With France and Sweden Registrations
June 10, 2016--WisdomTree, the exchange-traded fund ("ETF") and exchange-traded product ("ETP") sponsor announced that its UCITS ETFs are now available for sale in France and Sweden.
read more
WisdomTree Launches Two Quality Dividend Growth UCITS ETFs on the London Stock Exchange
June 9, 2016--Dividend Growth ETFs to Use Quality Metrics to Focus on Dividend Growth Companies
WisdomTree Quality Dividend Growth ETFs with focus on US and Global equities
read more
Two new UBS equity index ETFs with focus on sustainability launched on Xetra
June 9, 2016--ETFs provide access to performance of Japanese and UK companies with high ESG ratings.
read more
New WisdomTree commodity index ETF launched on Xetra
June 9, 2016--ETF tracks agriculture, energy, precious metals and industrial metals sectors.
read more
ESMA issues Technical Standards for European Long-Term Investment Funds
June 8, 2016--The European Securities and Markets Authority (ESMA) has today published its Final Report and draft Regulatory Technical Standards (RTS) for Regulation (EU) 2015/760, the European Long-Term Investment Fund Regulation (ELTIF).
read more
Deutsche Boerse adapts rules for MDAX, SDAX and TecDAX indices
June 7, 2016--Index composition to be determined quantitatively as of September/Role of Working Committee for Equity Indices redefined.
read more
New Amundi bond index ETF on floating rate corporate bonds launched on Xetra
June 7, 2016--ETF hedged against exchange rate fluctuations
read more
World's first Turkish bond index ETF launched on Xetra, issued by ZyFin
June 7, 2016--ETF physically tracks bonds with differing durations issued by the Republic of Turkey
read more
Multi-venue trading increases,liquidity in EU equity markets despite duplicate orders, ESMA says
June 6, 2016--The European Securities and Markets Authority (ESMA) has issued today an economic report on order duplication and liquidity measurement in EU equity markets.
read more
KCG adds senior sales trading duo
June 5, 2016--KCG Holdings has added two senior sales trading staff to its European team, as the electronic market-maker and broker selectively builds its..
read more
National Statistics: UK official holdings of international reserves: May 2016
June 3, 2016--This monthly release shows details of movements in the UK's official holdings of international reserves, or assets. These consist of gold, foreign currency assets and International Monetary Fund assets.
read more
ESMA publishes updated AIFMD Q&A
June 3, 2016--The European Securities and Markets Authority (ESMA) has published an updated questions and answers document (Q&A) on the application of the Alternative Investment Fund Managers Directive (AIFMD).
read more
Schaeffler AG to be included in MDAX
Deutsche Börse reviews index composition/Changes to be effective as of 20 June 2016
June 3, 2016--On Friday, Deutsche Börse announced changes to its selection indices, which will become effective on 20 June 2016.
read more
ETF expert joins BNP Paribas-owned passive shop
June 2, 2016--Exchange-traded fund specialist Isabelle Bourcier-twice listed as one of the 100 most influential women in European finance by FN-has taken up a senior role at a passive investment firm owned by BNP Paribas.
read more
ESMA reminds firms of responsibilities when selling bail-in securities
June 2, 2016--The European Securities and Markets Authority (ESMA) has today published a Statement reminding banks and investment firms ('firms') of their responsibility to act in their clients' best interests when selling bail-in-able financial instruments.
read more
Turnover at Deutsche Boerse's cash markets at 103.8 billion euros in May
June 1, 2016--Order book turnover on Xetra, Börse Frankfurt and Tradegate Exchange across all asset classes stood at €103.8 billion in May (May 2015: €125.6 billion).
read more
Recommended all-share merger between LSEG plc and Deutsche Boerse AG: Publication of Scheme Document, Exchange Offer Document and HoldCo Prospectus
June 1, 2016--The Merger gives shareholders the opportunity to participate in value creation in a world-leading, market infrastructure group anchored in Europe.
read more
Invesco Powershares launches two high dividend low volatility ETFs
June 1, 2016--Invesco PowerShares has listed the PowerShares FTSE UK High Dividend Low Volatility UCITS ETF and the PowerShares FTSE Emerging Markets High Dividend Low Volatility UCITS ETF on London Stock Exchange.
read more
ESMA publishes updated Q&A on CFDs and other speculative products
June 1, 2016--The European Securities and Markets Authority (ESMA) has published today an updated version of its question and answer document (Q&A) on the application of the Markets in Financial Instruments Directive (MiFID) to the marketing and sale of financial contracts for difference (CFDs) and other speculative products to retail clients (such as binary options and rolling spot forex).
read more