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
Monetary developments in the euro area: June 2015
July 27, 2015--The annual growth rate of the broad monetary aggregate M3 stood at 5.0% in June 2015, unchanged from the previous period.
read more
ESMA publishes statistical data on 2014 prospectus activity in EEA
July 23, 2015--The European Securities and Markets Authority (ESMA) has published its periodic report on statistical data regarding prospectus activity within the EEA, covering 2014.
read more
Guidelines on sound remuneration policies under the UCITS Directive and AIFMD
July 23, 2015--Summary
Reasons for publication
Article 14a(4) of Directive 2009/65/EC ("UCITS Directive"), as amended by Directive 2014/91/EU ("UCITS V Directive") provides that ESMA shall issue guidelines addressed to competent authorities or financial market participants concerning the application of the remuneration principles set out under Article 14b of the UCITS Directive ("UCITS Remuneration Guidelines").
read more
European Commission-Fact Sheet-The Investment Plan for Europe: Q&A
July 22, 2015--1.What is the Investment Plan for Europe? Why do we need it?
Since the global economic and financial crisis, the EU has been suffering from low levels of investment. Collective and coordinated efforts at European level are needed to reverse this downward trend and put Europe firmly on the path of economic recovery, which is the top priority of the Juncker Commission.
read more
Euro Area Investment Fund Statistics May 2015
July 21, 2015--In May 2015, the amount outstanding of shares/units issued by euro area investment funds other than money market funds was €106 billion higher than in April 2015.
read more
Standard & Poor's upgrades Greece
July 21, 2015--Ratings firm Standard & Poor's on Tuesday lifted Greece's credit rating by two notches, citing the three-year loan program and EUR7.16 billion ($7.84 billion) in three-month bridge financing secured, in principle, last week.
read more
ESMA publishes updates to Q&As on the application of the AIFMD
July 21, 2015--The European Securities and Markets Authority (ESMA) publishes updated questions and answers on the application of the AIFMD.
read more
UK's Osborne says no plans to loosen banks' ring-fence
July 21, 2015--British finance minister George Osborne said on Tuesday that he did not intend to allow a looser implementation of rules separating British banks' retail and investment banking operations.
read more
ESMA agrees to further renewal of short selling ban by Greek HCMC
July 20, 2015--The European Securities and Markets Authority (ESMA) has issued its official opinion agreeing to a further renewal, for a period of seven days, of the emergency short selling prohibition originally imposed by the Hellenic Capital Market Commission (HCMC) under the Short Selling Regulation on Monday 13 July.
read more
Commodity Rout Worsens as Prices Tumble to Lowest Since 2002
July 19, 2015--The rout in commodities deepened with prices touching the lowest since 2002 as the prospect of higher U.S. interest rates sent gold tumbling.
read more
Greek Banks to Open Monday as Next Parliamentary Vote Looms
July 19, 2015--Greek banks will reopen for basic services on Monday, three weeks after they were shut to prevent their collapse, as Prime Minister Alexis Tsipras prepares for a second parliamentary vote crucial to securing a bailout.
read more
Russia's Beating the BRICS in 2015 on Turnaround Potential
July 19, 2015--Which country would you invest in: a fast-growing economic powerhouse with a world-beating stock market or a tottering former superpower embroiled in a proxy war and heading for a recession?
read more
European biotechs rush to list on Nasdaq
July 15, 2015--A $245m fundraising by the French maker of a treatment for peanut allergy has highlighted a rush by European companies to raise money on Nasdaq's booming biotech market.
read more
Statistics: Forecasts for the UK economy: July 2015
July 15, 2015--Forecasts for the UK economy is a monthly comparison of independent forecasts.
read more
IMF Country Report-Germany: Selected Issues
1. This paper identifies episodes of large and sustained current account surpluses in advanced economies (AEs) and compares Germany's ongoing surplus with those episodes.
read more
EU steps up pressure for rapid deal to revive asset-backed debt
July 14, 2015--European Union reform of the securitized debt market to help to revive the region's economy is likely to be binding on member countries to speed up change, a senior official from the bloc's executive body said on Tuesday.
read more
New Lyxor bond index ETF launched on Xetra
ETF provides access to corporate bonds with variable interest rates
July 14. 2015--A new exchange-listed index fund issued by Lyxor International Asset Management has been tradable on Xetra and Börse Frankfurt since Tuesday.
read more
Europe's first ETF on Chinese government bonds launched on Xetra
ETF tracks performance of onshore bonds denominated in Renminbi
July 14, 2015--The db x-trackers II Harvest CSI China Sovereign Bond UCITS ETF (DR) gives investors first-time access to the performance of Chinese government bonds via a physically replicated ETF.
read more
DeltaOne Solutions and Horizon Software Announce ETF Data and Trading Technology Alliance
ETF sourcing and trading technology to improve efficiency and rationalize infrastructure
July 13, 2015-DeltaOne Solutions, a CoreOne Technologies company, today announced their alliance with Horizon Software.
read more
Investor Protection Does Not Always Benefit Investors
July 13, 2015--Although binding rules are important for the markets, a poorly conceived system of pension provision can be detrimental to investors.
read more
Punishing terms of Greek bailout deal
July 13, 2015-The austerity measures that Greece agreed to on Monday in return for a bailout to stave off a euro exit involve some of the harshest terms Athens has faced in five years of rescue programmes.
read more
ESMA agrees to further renewal of short selling ban by Greek HCMC
July 13, 2015--The European Securities and Markets Authority (ESMA) has issued its official opinion agreeing to a further renewal, for a period of seven days, of the emergency short selling prohibition originally imposed by the Hellenic Capital Market Commission (HMCM) under the Short Selling Regulation on Monday 6 July.
read more
Closure looms for hundreds of defined benefit pension schemes
July 12, 2015--A UK government consultation on radical changes to the retirement system could force hundreds of final salary pension schemes into closure, according to an influential consultancy
read more
Five Lyxor Factor ETFs launched on Xetra
ETFs provide access for the first time to risk factor strategies of the J.P. Morgan Europe index family
July 10, 2015--Five new exchange-listed index funds issued by Lyxor International Asset Management have been tradable on Xetra and Börse Frankfurt since Friday.
read more
Statistics: Forecasts for the UK economy: June 2015
June 17, 2015--Forecasts for the UK economy is a monthly comparison of independent forecasts.
read more
Flow Traders shares soar on debut
July 10, 2015--Shares in Flow Traders soared more than 12 per cent on its debut as the Dutch group became the first high-frequency trader to list in Europe.
read more
Euronext Amsterdam welcomes Flow Traders
Successful IPO values Flow Traders over €1.5 billion on listing
July 10, 2015--Today Flow Traders, a leading global technology-enabled liquidity provider, celebrated its listing on Euronext Amsterdam.
read more
Greece submits new bailout plan to avoid euro exit
July 10, 2015-- Greece early Friday laid out details of a new bailout plan to save it from the brink of financial collapse, offering a pensions overhaul and tax hikes in return for debt relief and a rescue loan from the eurozone.
read more
Deutsche Borse and Shanghai Stock Exchange celebrate first successful year of market data cooperation
Eight clients from mainland China signed in total
July 9, 2015--Deutsche Börse and Shanghai Stock Exchange (SSE) celebrate the anniversary of their successful market data cooperation.
read more
HM Treasury-Treasury minutes: July 2015
July 9, 2015--The HM Treasury-Treasury minutes: July 2015 is available.
read more
Euro area quarterly balance of payments and international investment position (first quarter of 2015)
July 9, 2015--The current account of the euro area showed a surplus of &euro238.2 billion (2.3% of euro area GDP) in the four quarters to the first quarter of 2015.
read more
Greece given Sunday deadline for debt deal
July 8, 2015--04:47 CET-European leaders gave debt-stricken Athens a final deadline of Sunday to reach a new bailout deal and avoid crashing out of the euro,
read more
Euronext Said to Aim to Appoint Its New CEO by Late September
July 8, 2015--Euronext NV plans to appoint a new chief executive officer by late September, according to a person familiar with the hunt for a permanent replacement to Dominique Cerutti.
read more
Launch of a new product range listed on Euronext Brussels: SOCIETE GENERALE (FR) TURBOS INFINIS BEST
July 8, 2015--For the first time on Euronext Brussels, Societe Generale is launching a new range of listed products called: SOCIÉTÉ GÉNÉRALE (FR) TURBOS INFINIS BEST.
read more
Nine State Street ETFs launched on Xetra
ETFs offer first-time access to sectors of the S&P 500 Select Sector index family
July 8, 2015--Nine new exchange-listed sector index funds issued by SPDR (State Street Global Advisors) have been tradable on Xetra and Börse Frankfurt since Wednesday.
read more
Parliament adopts CO2 market stability reserve
July 8, 2015--A reform of the EU Emissions Trading Scheme (ETS), informally agreed with the Latvian Presidency of the Council, was endorsed by Parliament on Wednesday.
read more
Climate: EU Parliament backs reform of carbon market
July 8, 2015--The European Parliament on Wednesday approved plans to overhaul the Europe Union's carbon market, a key part of strategies to curb the EU's global-warming emissions.
read more
A record level of 40 billion US dollars in net new assets was gathered by ETFs and ETPs listed in Europe in the first half of 2015 according to ETFGI
July 8, 2015--A record level of US$40 billion in net new assets (NNA) was gathered by ETFs and ETPs listed in Europe in the first half of 2015, surpassing the prior record of US$32 billion gathered in the first half of 2014, according to ETFGI's preliminary ETF and ETP global insights report for the first half of 2015.
read more
LSE July 2015 ETF & ETP Monthly Report
July 7, 2015News
London Stock Exchange's ETF team hosted a panel at the Greater China Forum held in Hong Kong on 15 June 2015.
read more
IMF Country paper-Italy: Selected Issues
This paper establishes a causal link between public sector efficiency at the provincial level and firm productivity using data for about 450,000 Italian firms.
read more
Northern Trust Monthly Funds Market Review: Irish Funds Industry Association rebrands
ECB hails T2S launch| Luxembourg fund industry ambition
Asia is rising fast to the top of the global wealth list, overtaking Europe in 2014 to nab the number two spot and looking set to replace North America as the world's wealthiest region next year, according to a new report by the Boston Consulting Group.
read more
Solactive launches Home Automation Index
July 7, 2015--Frankfurt-based index provider Solactive AG has launched the Solactive Home Automation Index, designed to track the price movements of stocks representative of the global home automation market.
read more
EBA issues advice on securitisation
July 7, 2015--Following the public hearing held on June 26, the EBA published the full text of its advice to the European Commission on a framework for qualifying securitisation.
read more
JPMorgan appears closer to launching ETFs in Europe
July 6, 2015--Analysts say US bank JPMorgan has taken "another step" towards rolling out its first exchange traded funds in Europe with the recent development of its indices offering.
read more
ESMA agrees to renewal of short-selling ban by Greek HCMC
July 6, 2015--The European Securities and Markets Authority (ESMA) has issued its official opinion agreeing to a renewal, for a period of seven days, of the emergency short selling prohibition originally imposed by the Hellenic Capital Market Commission (HMCM) under the Short Selling Regulation on Monday 29 June.
read more
EU's Moscovici sees financial transaction tax in place early 2017
July 6, 2015--Negotiations over a planned tax on financial transactions in 11 European countries could wrap up later this year and the levy could be in place by early 2017, EU Economic Affairs Commissioner Pierre Moscovici said on Wednesday.
read more
UPDATE 1-European bank shares dip after Greeks reject bailout terms
July 6, 2015--European bank shares fell almost 2 percent on Monday after Greeks overwhelmingly rejected conditions of a rescue package from creditors, throwing the future of its banks and its euro zone membership into doubt.
read more
Boutiques face existential threat as time runs out on MiFID II
July 6, 2015--Smaller fund firms have been left in limbo as delays in finalising dealing commission regulations leave them unsure of the future of their businesses.
read more
Bank of China lists first Euro-denominated bond on London Stock Exchange
July 6, 2015--€500 million bond issued by Bank of China in London
First Euro-denominated bond listed in London by Bank of China
Part of wider 'One Belt, One Road' bond issuance programme
read more
Solactive Index to capture Cubas Opening up-Underlying for Leonteq Certificate designed for Swiss and German market
July 6, 2015--Solactive AG has launched the Solactive Cuba Focused Caribbean Index, designed to follow North and South American companies likely to gain from the recent opening up of Cuba to the US.
read more
Lyxor had 'no choice' in closure of Greek ETF
July 5, 2015--Lyxor, the Paris-based asset manager, has spoken out for the first time about its decision to impose a block on investors withdrawing money from its Greek exchange traded fund.
read more
Greeks Reject Bailout Terms in Rebuff to European Leaders
July 5, 2015--Greeks delivered a shocking rebuff to Europe's leaders on Sunday, decisively rejecting a deal offered by the country's creditors in a historic vote that could redefine Greece's place in Europe and shake the Continent's financial stability.
read more