Etikett: bond

Global ETP sector again records net inflows in November

Global ETP sector again records net inflows in NovemberGlobal ETP sector again records net inflows in November; Another strong month for American ETP market; Substantial inflows for Equity ETFs in particular; Asia ETFs recorded significant outflows; Positive trend for Bond ETFs at an end for now.

Europe Monthly ETF Market Review; Deutsche Bank Markets Research

Data as at: 30.11.2015 Global ETP sector again records net inflows in November

Global ETP Market In and Outflows:

• The global ETP industry continued to grow during November. After net inflows totaling US dollar 34 billion in October, the November figure was a further US dollar 25.7 billion. As such, the industry now manages US Dollar 2.9 trillion. (p. 1, 23)
• As in the previous month, the American ETP sector was the driver of this growth. It contributed US dollar 26 billion to global growth. Since the start of the year US ETPs have secured virtually US dollar 200 billion. In keeping with the previous month, inflows from Equity ETFs dominated with US dollar 25 billion.
• The trend for Bond ETFs turned negative in November. In contrast to worldwide inflows of US dollar 14.5 billion for this segment in October, during the month just past investors withdrew US dollar 47 million. (p. 23)
• Inflows also declined for Commodities ETCs. After a plus of US dollar 789 million in October, the past month saw a minus of US dollar 153 million. (p. 23)
• In parallel with the American ETP sector, the European ETF sector continued to grow during November. Following net inflows of US dollar 6.9 billion for October, the sector secured US dollar 3.4 billion in November. Equity ETF inflows also dominated in this case. (p. 23)
• Conversely, Asian ETPs saw a continuation of the negative trend of the previous month. Investors withdrew US dollar 3.7 billion. Equity ETFs were particularly affected with outflows running to US dollar 3 billion. In fact, Bond ETFs also recorded a decline. (p. 23).

European ETF Market In and Outflows
Equities

• The positive trend for European ETFs continued during November. In total, the sector recorded net inflows of Euro 3.1 billion, compared with October’s Euro 5.9 billion. This was primarily due to Bond ETFs with net inflows of Euro 515 million which was significantly lower than the previous month (+ Euro 3.5 billion). At the same time, net inflows for Equity ETFs at Euro 2.5 billion were slightly higher than in October (+ Euro 2.4 billion). (p. 23)
• ETFs on US Equities were particularly in demand with European investors. With net inflows of Euro 637 million, US Equities accounted for one quarter of positive Equity ETF cash flows, followed by Global Indices (+ Euro 436 million) and Japanese Equities (+ Euro 387 million). This marked a trend change for US Equities after investors withdrew capital totaling Euro 227 million from this segment in October. Net inflows recorded by ETFs on European Equities fell to Euro 54 million after Euro 1.1 billion the previous month. (p. 25)
• Since the start of the year, cumulative net inflows recorded by ETFs on broadly-based European Equity Indices total Euro 20.3 billion, although during November the trend showed a slight change with investors withdrawing Euro 279 million from this segment. (p. 25)
• The positive shift in ETFs on Emerging Markets continued in November. This segment recorded a further Euro 6 million following Euro 824 million in October. Since the start of the year however, Emerging Markets ETFs have registered total outflows of Euro 1.9 billion. (p. 26)
• Having said that, during November inflows for ETFs on large Emerging Markets declined, in particular India ETFs where investors withdrew Euro 225 million. Positive inflows were recorded by ETFs on international Emerging Markets Indices. (p. 26)
• Strategy ETFs achieved a turnaround in November again registering inflows of Euro 178 million, after October’s outflows of Euro 481 million. (p. 24)

Bonds

• The positive trend for Bond ETFs also progressed in November, although net inflows of Euro 0.5 billion were significantly lower than the October figure (+ Euro 3.5 billion). (p. 26)
• In this arena, ETFs on Corporate Bonds accounted for the highest inflows with Euro 1.7 billion. This exceeded the October inflows figure. From an annual viewpoint, Corporate Bonds have registered net inflows amounting to Euro 13.1 billion. (p. 26)
• The positive trend over recent months for Sovereign Bonds has come to an end for the time being. Investors withdrew Euro 1.3 billion from this segment. (p. 26)

Commodities

• European Commodities ETPs registered Euro 166 million in November after Euro 340 million during October. (p. 27)
•While ETFs on Industrial Metals did once again generate slightly positive cash flows, ETFs on Precious Metals shed Euro 167 million contrasted with October when this segment had made a positive contribution to inflows. (p. 27)

Most Popular Indices

• In November, investors showed interest in Real Estate and Dividend ETFs. As such, ETFs on Real Estate Equity Indices in particular came high up the lists. (p. 28)
• The most popular Equity Indices in November were the S&P 500, the Euro STOXX 50 as well as the Stoxx 600. (p. 28)
• In the Bond arena, ETFs on Corporate Bond Indices in particular proved to be some of the most popular indices. (p. 28)

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SMART BETA FIXED INCOME EMERGING MARKET GOVERNMENT BOND ETF

SMART BETA FIXED INCOME EMERGING MARKET GOVERNMENT BOND ETF

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This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (the ”FCA”).

The information contained in this communication is for your general information only and is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision. Historical performance is not an indication of future performance and any investments may go down in value.


This document is not, and under no circumstances is to be construed as, an advertisement or any other step in furtherance of a public offering of shares or securities in the United States or any province or territory thereof. Neither this document nor any copy hereof should be taken, transmitted or distributed (directly or indirectly) into the United States.

This communication may contain independent market commentary prepared by ETFS UK based on publicly available information. Although ETFS UK endeavours to ensure the accuracy of the content in this communication, ETFS UK does not warrant or guarantee its accuracy or correctness. Any third party data providers used to source the information in this communication make no warranties or representation of any kind relating to such data. Where ETFS UK has expressed its own opinions related to product or market activity, these views may change.

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Large Inflows into European Equities, Sovereigns and Corporate Bonds

Large Inflows into European Equities, Sovereigns and Corporate Bonds

Deutsche Bank – Synthetic Equity & Index Strategy – Europe

European Monthly ETF Market Review – Large Inflows into European Equities, Sovereigns and Corporate Bonds

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Data in this report is as of 31st July 2015

European ETP Highlights

As of the end of July 2015, global ETP assets stood at $2.9 trillion with European ETP assets at $508bn (€459bn). In July, European ETPs continued its positive trend from the previous month and registered net inflows of +€7.5bn (+€1.4bn in the prev. month). Equity and fixed income ETFs both benefitted from inflows, receiving +€6.1bn and +€2.2bn respectively. Commodity ETPs listed in Europe saw outflows of -€0.8bn during the same period.

US Sector, Quant and China Sovereign bond product launches

State Street launched 9 sector ETFs that provide exposure to US equity GICS sectors. Lyxor launched 6 quantitative strategy equity ETFs in July while Deutsche Bank listed Europe’s first fixed income ETF providing exposure to Chinese Government bonds.

European equities continue to be favoured while fixed income ETF reverses trend to experience inflows.

European and US listed ETFs with European Equity exposure observed strong monthly inflows benefitting from +$4bn (+$19.4bn YTD inflows) and +$3.2bn (+$34bn YTD) respectively following the Greek resolution. We also observed a reversal trend in the fixed income space where Sovereign (+€1bn) and Corporate Bonds (+€1bn) dominated inflows. This follows two consecutive months of outflows.

European listed ETFs tracking Chinese equities experiences small outflows despite $8bn inflows into the market through Asian listings

The recent Chinese stock market fall had spurred the Chinese Government to take measures to mitigate the risk of a continued sell-off. This market volatility had elevated trading activity in ETFs tracking China globally. Investors trading European listed Chinese ETFs were net sellers (-€218mn). However in Asia, ETFs tracking Chinese equities benefited from large inflows of +$8.1bn.

Gold loses its shine while crude oil witness inflows

In July, Gold based ETPs witnessed outflows of -€0.7bn amid falling gold prices. Commodity prices have recently taken a hit following concerns of lower demand from China. Crude oil ETPs, which have been registering inflows since start of the year continued its positive run in July by registered inflows of +€266mn (YTD net flow at +€1.1bn). This is despite the fact that the oil price has been in a downward trend.

 

Investors Accessing Broad Commodity Exposures

Investors Accessing Broad Commodity Exposures

ETF Securities Commodity ETP Weekly Investors Accessing Broad Commodity Exposures

•    Agricultural commodity prices surge, attracting investors on supply concern.

•    Sugar inflows of US$15.3mn mark the largest inflows into any commodity over past month.

•    Optimism over global recovery drives outflows from gold.

•    Largest inflows into energy ETPs for 14 weeks, totaling US$10.5mn.

•    This Thursday, we are hosting the webinar: ”Sentiment vs Fundamentals, What Happens Next?” taking a look at what may happen when prices realign with fundamentals. Learn more and register

Download the complete report (.pdf)

Broad basket commodity ETPs received over 50% of total inflows. With bond and some equity benchmarks seeming stretched, investors appear to be increasingly looking at the relative value of the commodity market and gaining broad based exposure via ETPs that offer a diversified exposure to a number of sectors. Meanwhile, despite the prolonged negotiations attempting to stem a Greek debt default, investors appear to be anticipating an 11th hour deal. Investors are becoming more optimistic about economic conditions and appear to be gaining more cyclical exposures and reducing defensive assets and with China continuing to support its economy with fresh rate cuts, commodity prices are likely to be well supported.

Agricultural commodity prices surge, attracting investors on supply concern. Wheat led the agricultural sector gains, as excess rainfall in the US is expected to further delay to the winter crop harvest. Meanwhile, the International Grains Council has also released estimates indicating a deficit for the 2015/16 crop year for both wheat and corn. However, with significant stock levels for both commodities, material gains will depend on how growing conditions will affect the progress of this year’s crop.

Sugar inflows of US$15.3mn mark the largest inflows into any commodity over past month. Bargainhunters appear to be seeing the 6½ year low sugar prices as an attractive entry point amid a global sugar glut. While expectations abound for another year of surplus in 2015, the threat to sugar supply from the El Niño could curb supplies from India, the world’s second largest producer. Additionally, data released last week showed that some Brazilian production in the June 2015 remains significantly below the same period a year earlier.

Optimism over global recovery drives outflows from gold. Last week saw the largest outflows from gold in 14 weeks, totaling US$126.8mn. Investors are seeking more cyclical exposures, believing in the sustainability of the economic recovery. In contrast to gold, and hovering at multi-year lows, silver, in particular has experienced strong inflows in 2015, with a greater amount of its demand profile coming from industrial sources.

Largest inflows into energy ETPs for 14 weeks, totaling US$10.5mn. Inflows into broad basket energy ETPs reached a 5-week high, netting US$7.2mn. Long natural gas ETPs received the biggest single commodity flows, receiving US$5.4mn after the build in storage levels surprised the market on the downside. Recently a surge in demand from power generation has seen stocks decline, largely due to warmer weather in recent weeks.

Key events to watch this week. With the Greek crisis enflamed by the decision to hold a referendum on the reform and bailout conditions, the secondary focus for investors will be the CPI readings for the Eurozone and the nonfarm payrolls in the US to gauge the extent that the future of monetary policy path will be divergent. Commodity investors will again focus on the weekly oil and natural gas storage figures, while in the agricultural space, this week’s USDA crop conditions and acreage reports will be monitored for any potential threat to current supply expectations.

Video Presentation

Martin Arnold, Research Analyst at ETF Securities provides an analysis of last week’s performance, flow and trading activity in commodity exchange traded products and a look at the week ahead.

For more information contact

ETF Securities Research team
ETF Securities (UK) Limited
T +44 (0) 207 448 4336
E info@etfsecurities.com

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Lingering Threats Depress Investor Sentiment

Lingering Threats Depress Investor Sentiment

ETFS Multi-Asset Weekly Lingering Threats Depress Investor Sentiment

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Highlights

Stars align for commodity markets.

China equity markets higher, but volatility reigns.

USD weakness unlikely to last.

Concern about Greek finances, alongside disappointing German growth data resulted in European equity benchmarks finishing the week in the red. In contrast, Chinese equities moved higher in choppy trade as soft data lifted expectations of further stimulus from policymakers. Defensive investors prompted a gold rally, with its perception as a hedge against lingering threats to the economic environment increasing its appeal. We expect the soft US economic data will fade and the growth divergence with the Eurozone will again become pronounced and pull forward expectations for a rate hike, in turn lifting the USD.

Commodities

Stars align for commodity markets. Natural gas surged following expectations of warmer US weather is boosting demand for natural gas to fuel additional demands for power. With storage remaining adequate and not far from the longer-term average level, we expect the duration of this rally to be short-lived. Rising bond market volatility and a weaker US Dollar buoyed precious metals markets, with silver leading the way. Gold was also buoyant as investors remain cautious and European equities traded choppy ranges. With silver remaining strongly tied to gold, the key for a sustainable rally in silver lies in rising industrial demand. A good indicator of whether this demand component is rising is stockpiles which unfortunately are not showing signs of decline yet. If sentiment improves, a correction could lie in wait.
.

Equities

China equity markets higher, but volatility reigns. Chinese equities received a boost despite a string of poor economic data, as investors were optimistic that Chinese authorities will introduce additional stimulus measures to buoy the economy. Choppy trading has characterised Chinese equity markets and we expect that is unlikely to disappear in the near term, until investors see a more stable underlying economic environment. Certainly both the Reserve Requirement Ratio remains elevated and we expect that the RRR and official rates could be lowered in coming months. Meanwhile, European equity markets lost ground as weaker growth in Germany in Q1 added to the negative tone surrounding the lingering threat of Greek default. UK equity markets also struggled after the Bank of England downgraded its outlook for UK economic growth. Although we expect potential for further near term setbacks, in the medium term, equity valuations should be bolstered by rising demand on the back of low financing costs as a result of low policy rates and depressed energy prices.

Currencies

USD weakness unlikely to last. We expect the recent batch of soft US economic data to be an aberration rather than the beginning of a trend and this should gradually translate into USD strength. This week’s FOMC minutes will be balanced, in line with previous communications, but should keep rate hikes on the table. While the market has pushed back rate hike forecasts somewhat in recent weeks and is currently expecting the first increase in November, we expect a September move. Central banks will continue to be in the spotlight, with both the Bank of England and the Bank of Japan holding meetings. While there should be little change in UK policy, if Japanese industrial production and Q1 GDP growth disappoint, that could be the catalyst to provoke the BOJ to act, and in turn pushing the USD/JPY higher toward our year-end target of 125.

For more information contact:

ETF Securities Research team
ETF Securities (UK) Limited
T +44 (0) 207 448 4336
E  info@etfsecurities.com

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This communication has been issued and approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by ETF Securities (UK) Limited (”ETFS UK”) which is authorised and regulated by the United Kingdom Financial Conduct Authority (”FCA”).

Investments may go up or down in value and you may lose some or all of the amount invested.  Past performance is not necessarily a guide to future performance. You should consult an independent investment adviser prior to making any investment in order to determine its suitability to your circumstances.

The information contained in this communication is for your general information only and is neither an offer for sale nor a solicitation of an offer to buy securities. This communication should not be used as the basis for any investment decision. Historical performance is not an indication of future performance and any investments may go down in value.

This communication may contain independent market commentary prepared by ETFS UK based on publicly available information. Although ETFS UK endeavours to ensure the accuracy of the content in this communication, ETFS UK does not warrant or guarantee its accuracy or correctness. Any third party data providers used to source the information in this communication make no warranties or representation of any kind relating to such data. Where ETFS UK has expressed its own opinions related to product or market activity, these views may change. Neither ETFS UK, nor any affiliate, nor any of their respective, officers, directors, partners, or employees accepts any liability whatsoever for any direct or consequential loss arising from any use of this publication or its contents.

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