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
July 2014: Flash Consumer Confidence Indicator
July 23, 2014--In July 2014, the DG ECFIN flash estimate of the consumer confidence indicator decreased in both the EU (by -1.2 points to -5.5) and the euro area (by -0.9 points to -8.4) compared to June.
read more
ESMA consults on counterparty risk calculation methods for UCITS subject to central clearing
July 22, 2014--The European Securities and Markets Authority (ESMA) has launched a consultation on the calculation of counterparty risk by Undertakings for Collective Investment in Transferable Securities (UCITS) which enter into OTC derivative transactions which need to be centrally cleared under the European Markets Infrastructure Regulation (EMIR).
read more
Turquoise expands clearing choice for ETF trades
July 21, 2014-Turquoise, the London Stock Exchange's alternative equity market, will start offering a choice of clearing house for exchange-traded funds from Monday,
read more
ESMA issues updated Q&A on the application of the Alternative Investment Managers Directive (AIFMD)
July 21, 2014--The European Securities and Markets Authority (ESMA) published today an update of its Questions & Answers (Q&A) document on the application of the Alternative Investment Managers Directive (AIFMD).
read more
IMF Country Report-Germany: Selected Issues
The build-up of Germany's current account surplus over the last decade does not lend itself to a single-factor explanation, as both global and domestic factors, as well as policy changes led to increased savings and lower investment.
read more
Two new ComStage equity index ETFs launched on Xetra
ETFs provide currency-hedged access to MSCI Japan and S&P 500
July 18, 2014--Two new equity index funds issued by ComStage have been tradable on Xetra since Friday.
ETF name: ComStage MSCI Japan 100% Daily Hedged Euro UCITS ETF
Asset class: equities
ISIN: LU1033694107
read more
ESMA advises Commission on creditworthiness assessment for sovereign debt
July 18, 2014--The European Securities and Markets Authority (ESMA) has published its advice to the European Commission on the appropriateness of the development of a European creditworthiness assessment for sovereign debt.
read more
DAX serves as basis for first-ever European exchange-traded fund in China
Chinese investors can now access performance of leading German companies for the first time
July 17, 2014--The DAX index underlies the first exchange-traded fund (ETF) based on a European index that will be available in China. The HuaAn Germany DAX 30 ETF was introduced by HuaAn Asset Management Co. Ltd. on July 14, 2014 and will later be listed on the Shanghai Stock Exchange.
read more
New issuer Boost ETP launches four leveraged exchange-traded notes on Xetra
July 16, 2014--Four exchange-traded notes (ETNs) issued by Boost ETP have been tradable on Xetra since Tuesday. The new products are linked to indices in the LevDAX, ShortDAX and EURO STOXX 50 index families and enable investors to participate in the performance of rising or falling share prices with a leverage factor of three.
read more
Statistics: Forecasts for the UK economy: July 2014
July 16, 2014--Forecasts for the UK economy is a monthly comparison of independent forecasts.
read more
ESMA details new market abuse regime
July 15, 2014-The European Securities and Markets Authority (ESMA) has launched a consultation on the new Market Abuse Regulation (MAR) which entered into force on 2 July 2014.
read more
Bats Chi-X gets green light for extending clearing house choice
July 14, 2014--Europe's largest equities platform has extended the choice of clearing houses through which it allows trades in exchange-traded funds to be cleared.
read more
Five new ETNs from ETF Securities launched on Xetra
ETNs offer access to foreign currency markets via currency baskets
July 14, 2014--Five ETNs on currency baskets from the ETF Securities product offering have been tradable on Xetra since Monday. The new ETNs track the performance of four tactical and one strategic currency basket.
read more
IMF Report-Euro Area Policies: Selected Issues
July 14, 2014--This Selected Issues paper on the euro area was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with the member countries forming the euro area.
read more
IMF-Euro Area Policies: 2014 Article IV Consultation-Staff Report; Press Release; and Statement by the Executive Director
July 14, 2014--Summary: KEY ISSUES Context. Real output has expanded for four consecutive quarters, and financial market sentiment has improved markedly. But the recovery is weak and uneven. Inflation has been too low for too long, financial markets are still fragmented, and structural gaps persist: these hinder rebalancing and substantial reductions in debt and unemployment.
read more
Source and PIMCO expand listings on SIX
July 14, 2014-- Source, a leading European provider of Exchange Traded Products (ETPs), and PIMCO, a leading global investment management firm, are pleased to announce that two of their most popular ETFs are now being listed on the SIX Swiss Exchange.
read more
Regulators turn aim on broker research
Analysis is expensive to produce and the FCA must tread carefully
July 11, 2014--The annual report from the Financial Conduct Authority struggles to avoid sounding smug, but in vain. "Our first year was both challenging and encouraging" it burbles, detailing its triumphs as a consumer champion.
read more
Recovery Strengthens in Central and Eastern Europe, Yet Risks Remain, says World Bank
July 11, 2014--Economic growth is expected to almost double in the EU11* countries in 2014, and to continue to strengthen in 2015, according to the World Bank's latest EU11 Regular Economic Report (EU11 RER). The report says that, overall, EU11 GDP growth is forecast to strengthen from 1.4 percent in 2013 to 2.6 percent in 2014.
read more
FCA-GC14/3 Retail Investment Advice: Clarifying the boundaries and exploring the barriers to market development
July 11, 2014--FCA has published guidance to help clarify the different types of retail investment sales models, the boundaries between them and the associated regulatory requirements.
read more
Temporary restriction in short selling
July 11, 2014--The Financial Conduct Authority ("FCA") notifies that it temporarily prohibits short selling in the following instrument under Articles 23 (1) and 26 (4) of Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012 on short
read more
Eurex to launch variance futures based on EURO STOXX 50
Eurex reaches deal with DRW to use U.S.-patented method for listed variance futures
July 11, 2014--Eurex is set to extend its product range by introducing a listed variance future on September 22, 2014, based on the EURO STOXX 50, the most prominent equity index in Europe.
read more
ESMA defines central clearing of interest rate and credit default swaps
July 11, 2014--The European Securities and Markets Authority (ESMA) has launched a first round of consultations to prepare for central clearing of OTC derivatives within the European Union. The two consultation papers seek stakeholders' views on draft regulatory technical standards (RTS) for the clearing of Interest Rate Swaps (IRS) and Credit Default Swaps (CDS) that ESMA has to develop under the European Markets Infrastructure Regulation (EMIR).
read more
Lyxor Hedge Fund Index up 0.7 per cent in June
July 10, 2014--The Lyxor Hedge Fund Index was up 0.7 per cent in June,
read more
Global Advisors announces world's first regulator-approved Bitcoin investment fund
July 10, 2014--Global Advisors Jersey (GAJ), an investment management company based in the Channel Islands, has received regulatory approval for a Bitcoin Investment fund.
read more
Turkey: Macroeconomic stability and structural reform key to strong and inclusive growth, OECD says
July 10, 2014--Turkey's economy will grow stronger in the coming years, but remains overly dependent on domestic consumption funded by foreign finance, according to the latest OECD Economic Survey of Turkey.
read more
ESMA Q&A X on EMIR Implementation
July 10, 2014--The Q&A's purpose is to promote common supervisory approaches and practices in the application of EMIR. It provides responses to questions posed by the general public, market participants and competent authorities.
read more
Final Report on ESMA Guidelines on enforcement of financial information
July 10, 2014--The European Securities and Markets Authority (ESMA) has published its final Guidelines on the enforcement of financial information published by listed entities in the European Union (EU).
read more
ECB-Euro area securities issues statistics
May 9, 2014--The annual rate of change of the outstanding amount of debt securities issued by euro area residents was -0.7% in May 2014,compared with -1.0% in April. For the outstanding amount of quoted shares issued by euro area residents,the annual growth rate was 2.2% in May 2014,the same as in April.
read more
BOOST's Silver 3x Lev (3SIL) & Gold 3x Lev ETP (3GOL) The Top Performing ETPs on the LSE in June
July 8, 2014--Boost Silver 3x Leverage Daily ETP (3SIL) rose 38% (GBP) in June on the back of silver futures rising 10.4% (GBP) in the same period, making it the best performing ETP on the LSE.
LSE's third best performing ETP was Boost Gold 3x Leverage Daily ETP (3GOL). 3GOL rose 16.5% (GBP) in June as gold futures rose 4% in the same period.
read more
BOOST's Silver 3x Leverage ETP (3SIL) and Gold 3x Leverage ETP (3GOL) The Top Performing ETPs in Italy in June
July 8, 2014--Boost Silver 3x Leverage Daily ETP (3SIL) rose 40% (EUR) in June on the back of silver futures rising 12% (EUR) in the same period, making it the best performing ETP in Italy.
The third best performing ETP in Italy was Boost Gold 3x Leverage Daily ETP (3GOL). 3GOL rose 18.3% (EUR) in June as gold futures rose 5.7% in the same period.
read more
ETFGI: ETFs and ETPs listed globally reached US$2.64 trillion in assets, a new record high, at the end of Q2 2014
July 7, 2014--ETFs and ETPs listed globally gathered US$34.8 Bn in net new assets in June and US$126.6 Bn YTD, which outpaces the previous high of US$106.4 Bn at this point set in 2012.
read more
European ETPs could hit half a trillion dollars this year
July 7, 2014--Assets in exchange-traded products (ETPs) in Europe rose by a net $32 billion (€24 billion) in the first half of the year, a growth rate that would take total assets to more than half a trillion dollars by year-end if it persists.
read more
Lyxor UK grows institutional sales teams in UK and Northern Europe
July 7, 2014--Lyxor Asset Management UK has made three appointments to lead its growth in the UK and Northern European markets.
read more
Source and Morgan Stanley team up on smart beta "month-end effect" ETF
July 7, 2014--London-based exchange-traded fund provider Source and investment bank Morgan Stanley have teamed to launch the Source Morgan Stanley Europe MEMO Plus UCITS ETF (EMSE), an ETF which aims to outperform the broad European equity market by exploiting the so-called "month-end effect".
read more
EBA publishes final guidelines on significant credit risk transfer for securitisation transactions
July 7, 2014--The European Banking Authority (EBA) published today a final set of Guidelines that will support both originator institutions and competent authorities in the assessment of significant risk transfer (SRT) for securitisation transactions.
read more
Deutsche Bank's asset arm plans to power up in London
July 7, 2014--Deutsche Bank's asset management arm is planning to double the number of financial professionals it employs in London to 600 over the next five years.
read more
BlackRock restricts share lending after short selling attack on Blinkx
World's largest asset manager changes policy after losing €30m in a day over controversial blog by Harvard professor
July 5, 2014--BlackRock, the world's largest asset manager, has barred its City office from loaning shares following a short selling attack on Blinkx, a London-listed online video advertising company in which it is biggest shareholder, The Sunday Telegraph can disclose.
read more
EBA publishes final draft technical standards on conditions for assessing materiality of extensions and changes of internal approaches for market risk
July 4, 2014--The European Banking Authority (EBA) published today its final Regulatory Technical Standards (RTS) specifying the conditions for assessing the materiality of extensions and changes of the Internal Models Approach (IMA) for market risk.
read more
EBA proposes potential regulatory regime for virtual currencies, but also advises that financial institutions should not buy, hold or sell them whilst no such regime is in place
July 4, 2014--The European Banking Authority (EBA) published today an Opinion addressed to the EU Council, European Commission and European Parliament setting out the requirements that would be needed to regulate 'virtual currencies'. The Opinion is also addressed to national supervisory authorities and advises to discourage financial institutions from buying, holding or selling virtual currencies while no regulatory regime is in place.
read more
Source hires head of European capital markets
July 4, 2014--Exchange-traded fund provider Source has appointed Juergen Blumberg as executive director, head of European capital markets.
read more
IMF-France: Selected Issues paper
Introduction 1. While the resilience in private consumption has supported domestic spending in France during the crisis, business investment remains a substantial drag on growth. In 2013, private consumption was 2.5 percent higher than its pre-crisis level whereas business investment was still 9 percent lower than its pre-crisis peak.
read more
UK Official holdings of international reserves: June 2014
July 3, 2014--The UK official holdings of international reserves-June 2014 is now available
read more
UBS lists continental Europe and UK mid-cap equity ETFs
July 2, 2014--UBS Global Asset Management, a leading European provider of exchange-traded funds, has listed two new ETFs on the London Stock Exchange: the UBS MSCI Europe ex-UK UCITS ETF (UC77) and the UBS FTSE 250 UCITS ETF (UC78).
read more
IMF-Russian Federation: Selected Issues
July 1, 2014--Summary: Russia's trend growth is volatile. The transition from a centrally planned to a market economy started in 1991, hence time series are relatively short compared to other countries.
read more
Turnover at Deutsche Borse's cash markets at 93.7 billion euros in June
July 1, 2014--Order book turnover on Xetra, the Frankfurt Stock Exchange and Tradegate stood at &euro93.7 billion in June (June 2013: &euro102.5 billion). Of the &euro93.7 billion, &euro86.2 billion were attributable to Xetra (June 2013: &euro95.3 billion). &euro3.9 billion were attributable to the Frankfurt Stock Exchange (June 2013: &euro4.2 billion). Order book turnover on Tradegate Exchange* totalled approximately &euro3.6 billion in June (June 2013: &euro3.0 billion).
read more
Two new SPDR ETFs launched on Xetra
ETFs based on US stock corporations
July 1, 2014-- Two new equity index funds from the ETF offering issued by SPDR (State Street Global Advisors) have been tradable in the XTF segment on Xetra since Tuesday.
ETF Name: SPDR Russell 3000 U.S. Total Market UCITS ETF
Asset class: equity index ETF
Total expense ratio: 0.25 percent
read more
HSBC launches smart beta ETF
July 1, 2014--HSBC has launched the first of a range of 'smart beta' ETFs, giving investors exposure to one of its own tailored global benchmarks.
read more
Deutsche Asset & Wealth Management has listed its exchange-traded fund (ETF) providing exposure to Germany's famous 'Mittelstand' companies on the London Stock Exchange.
July 1, 2014--Deutsche Asset & Wealth Management has listed its exchange-traded fund (ETF) providing exposure to Germany's famous 'Mittelstand' companies on the London Stock Exchange.
read more
Source lists 16 ETPs on LSE
July 1, 2014--Exchange traded fund provider Source has listed 16 of its ETFs and ETCs on the London Stock Exchange.
read more
UBS AM lists FTSE250 & MSCI Europe ETFs on LSE
July 1, 2014--UBS Global Asset Management has listed two new ETFs on the London Stock Exchange, providing exposure to UK mid-caps and continental European equities.The UBS ETF-FTSE 250 UCITS ETF and the UBS ETF-MSCI Europe ex-UK UCITS ETF are being launched in response to client demand.
read more
ETF Securities expands currency ETP range
July 1, 2014-ETF Securities, a leading provider of exchange-traded products (ETPs), has launched a range of currency basket ETPs.
read more
Two new UBS ETFs launched on Xetra
ETFs provide access to stock corporations based in the UK and Europe
June 30, 2014--Two new exchange-listed equity index funds from the issuer UBS Global Asset Management have been tradable in Deutsche Börse's XTF segment since Monday.
Asset class: equity index ETF
ISIN: LU1048312737
Total expense ratio: 0.25 percent
Distribution policy: distributing
read more
CFTC.gov Commitments of Traders Reports Update
Geopolitical Risks Cloud Future of Russian Economy
June 30, 2014--Uncertainties set to hamper growth in the short to medium term
read more
Enhanced protection for retail investors: MiFID II and MiFIR
June 30, 2014--Changes are being made to a key piece of European law whose purpose is to protect you when you buy or invest in financial products. The Markets in Financial Instruments Directive (MiFID) is being updated and strengthened in some important areas and will be known as MiFID II.
read more
France to set up renminbi clearing system
June 29, 2014--France's central bank has taken the first step towards the creation of a Paris-based renminbi clearing and settlement system.
read more