Deutsche Banks ökade andel på ETF-marknaden Även om det inte syns lika tydligt i Sverige så märks det ordentligt internationellt. Deutsche Asset and Wealth Management har under det senaste året attraherat miljarder i form av nya tillgångar genom bankens serie av börshandlade fonder, samtidigt som Deutsche har fått ett rykte om sig att vara en internationellt fokuserad ETF-leverantör som kan hantera smart beta produkter.
I USA har denna ETF-leverantör sett nettoinflöden på 2,3 miljarder dollar under årets första tio månader, mer än dubbelt så stort kapitalinflöde som under hela 2013. Deutsche Asset and Wealth Management är nu en av de tio största ETF-leverantörerna i USA i år sedan det förvaltade kapitalet stigit från en miljard dollar 2013 till nästan fyra miljarder dollar vid månadsskiftet.
En aggressiv tillväxtplan
Deutsche följer en aggressiv tillväxtplan och har fått ett genombrottsår efter genomförandet av strategin. Kanske kommer vi att få se samma sak i Sverige också?
Deutsche kom in på den amerikanska marknaden för passiva börshandlade fonder relativt sent, men har tagit stora marknadsandelar och har lyckats undvika de undvika billiga traditionella beta erbjudanden som domineras av de största aktörerna, som Blackrocks iShares, Vanguard och State Street Global Advisor SPDRs. Detta beror på den kraftfulla marknadsbearbetningen som Deutsche gjort, vilket den tyska banken kunnat göra med hjälp av en tung budget.
db X-trackers
Deutsche sålde av sin serie råvaruprodukter till Invesco PowerShares, och använde pengarna till att marknadsföra sin serie db X-trackers produkter. I dag erbjuder Deutsche 23 olika db X-trackers i USA, en produktserie som vinner allt mer mark för sin förmåga att hantera den internationella marknadsexponeringen och dess förmåga att hantera och säkra valutarisker.
ETF-utgivaren hyrde tidigt in in iShares tidigare analyschef, Dodd Kittsley för att främja utbildning och medvetenhet om företagets linje av valutasäkrade internationella börshandlade fonder på olika aktieindex och marknader.
Till exempel, Deutsche db X-trackers MSCI EAFE Hedged Equity Fund (NYSEArca: DBEF), med 1,4 miljarder dollar i förvaltat kapital, hjälper investerare att få en exponering mot utvecklade marknader i Europa, Australasien och Fjärran Östern medan säkring mot eventuella negativa effekter av deprecierande valutor.
As of the end of May 2014, global ETP assets approached $2.41 trillion (€1.77 trillion) rising by $57.2bn for the month of May. European ETPs received +€4.6bn of cash inflows. Equity exposed ETFs benefitted most by gathering +€3.5bn, while fixed income products had yet another positive month collecting +€1.4bn of cash in-flows. Commodity based ETFs listed in Europe saw modest outflows of -€0.3bn.
ETF flows show no clear trend in equity allocation
Our analysis suggests that investment in ETFs with equity exposure to be distributed across North America, Europe and Emerging Markets, with no clear preference for regions.
In the fixed income space, we continue to see investment being made into Emerging Market Government Bond indices as shown in our Top 10 monthly Fixed Income inflows on Figure 56. We also observed mixed flows among ETFs benchmarked to European Sovereigns likely due to the uncertainty of the extent of monetary policy easing at the ECB meeting on June 5th.
iShares to merge three US ETFs listed in Europe
iShares announced its plan to merge three European listed ETFs with exposure to US equity markets to create a single large fund. The ETFs concerned are iShares S&P 500 UCITS ETF (SACC LN), iShares Core S&P 500 UCITS ETF (CSSPX SW) and MSCI USA Large Cap UCITS ETF (CSUSL SW). The newly consolidated ETF will have assets under management of over €2.9bn and will be competitively priced at 0.07% TER.
12 further db x-Trackers ETFs to convert to physical
Deutsche Asset & Wealth Management announced that 12 products will be converted from synthetic replication to physical replication. The ETFs are mostly with exposure to Asia Pacific region and has in aggregate approximately €2.5bn of assets under management. The conversion will be carried out between July 7th 2014 and December 31st 2014.
MSCI Annual Market Classification Review . MSCI announced today that China A-shares will not be included in the MSCI Emerging Markets Index as part of the 2014 Annual Market Classification Review, but will remain on the review list as part of the 2015 Review.
This is one of the three potential outcomes (option three) we pointed out in our recent report “Including China A shares in MSCI EM index: is it the time?”. As we explained in that report, while China has made significant progress in opening up its capital market, the three obstacles still exist and no major progress has been made.
We notice that there have been promises that some of these issues will be resolved soon (at least partially), but MSCI’s decision may not be based on the expectation of the future developments. In addition, based on our conversations with fund managers, they still feel it is quite difficult to manage funds including China A shares. Postponing the decision to next annual market classification review in 2015 will give China more time to further open up, which will bolster the case for MSCI inclusion. This will also give enough time for MSCI and the investment community to fully analyze the situation, and prepare for the inclusion.
On the other hand, MSCI acknowledged that “the A share market is effectively opening as we speak” because many investors are already investing in the China A-shares and the quota granted has increased significantly. MSCI also highlighted further regulatory reforms and other changes expected in the near term, such as implementation of the Shanghai/Hong Kong Stock Connect program (expected in October 2014). Therefore, we believe an off-cycle review (for example in December 2014) is still possible (the option two in the report mentioned above).
In addition, MSCI will introduce by June 27, 2014, the MSCI China A International Index as a standalone index. This index and its regional and global combinations can be used as benchmarks by QFII and RQFII investors to complement the already extensive series of MSCI China A Indexes.
MSCI also announced that it will not promote Korea and Taiwan to Developed Markets index. This is consistent with what we expected in our earlier report. Furthermore, MSCI will remove these two countries from the review list for potential reclassification for 2015, due to the absence of significant improvements in key accessibility areas for the past few years. Both countries may be added back to the review list as soon as there will be meaningful improvements.
Mexikansk urspårning på grund av ekonomisk svaghet
Rallyt i mexikanska aktier och börshandlade fonder kan avta då landets regering sänker sina prognoser för 2014 på grund av dålig exportefterfrågan och ett fall i konsumenternas förtroende efter en skattehöjning. IShares MSCI Mexico Capped ETF (NYSEArca: EWW), som stigit cirka åtta procent under de tre senaste månaderna backade efter detta uttalande. Det finns risk för en mexikansk urspårning på grund av ekonomisk svaghet i landets ekonomiska tillväxt.
Finansdepartementet reviderade ned Mexikos tillväxtprognos till 2,7 % från 3,9 % efter det att BNP siffrorna visade en tillväxt om 1,8 % för första kvartalet, jämfört med median uppskattningar av 2,1%. Fernando Aportela, vice finansminister i Mexico sade att tillväxten var otillräcklig, och betydligt lägre än vad Mexiko kan presetera, men att han ser fram mot de kommande kvartalen och hoppas kunna visa att landet går in i en snabbare tillväxtcykel.
Den mexikanska centralbanken har sänkt sin tillväxtprognos för 2014 till 2,3 % -3,3 % i år jämfört med tidigare 3 % -4 % efter konsumenternas förtroende sjönk till den lägsta nivån på nästan fyra år efter det att nya skatter trädde i kraft. Under 2013 växte den mexikanska ekonomin med 1,1 procent, den långsammaste tillväxten sedan recessionen 2009. Landets regering har ökat utgifterna med 13 procent under det första kvartalet och centralbanken har hållit räntan oförändrad på rekordlåga 3,5 procent för att kick-starta ekonomin.
Samtidigt har den mexikanska peso stadigt stärkts till ett fem månaders högsta mot den amerikanska dollarn. Peson handlas i dag runt 12,87 per dollar.
Vi noterar att Deutsche Asset and Wealth Management har lanserat en ny produkt, med exponering mot Mexiko. Med hjälp av denna kan investerare skydda sig mot valutarisken. Den nya ETFen heter db X-trackers MSCI Mexico Hedged Equity Fund (NYSEArca DBMX). Observera att en starkare peso kommer att gynna en icke valutasäkrad ETF, vilket gör att EWW är ett bättre alternativ för den som tror att peson kommer att fortsätta uppåt. DBMX har ökat 4,8 % under de senaste tre månaderna och kommer att vara ett bättre alternativ om peson börjar depreciera mot dollarn.
MSCI will announce its annual market classification review results on June 11
MSCI announced in June 2013 that it included China A shares in the review list for potential inclusion to its Emerging Markets (EM) index, which currently include only some of the Chinese shares listed overseas and B-shares listed in China. In March 2014, MSCI initiated a consultation on a proposed roadmap for inclusion of China A shares. MSCI will announce its decision in the morning of June 11, 2014 (Hong Kong time). If MSCI decides to include China A shares, the first change will be implemented in May 2015. In addition, Korea and Taiwan are also in the review list to be promoted from EM to DM.
A small step, but an important milestone in opening up China’s equity market
MSCI proposes to include 5% of China A shares’ float market cap as the first step (60 bps in MSCI EM, and 2.9% in MSCI China). China’s country weight will increase from currently 19% to approximately 20%. While this is a very small step, it is the first time China A shares included in a global benchmark.
China has made significant progress in market liberalization
The pace of reform and market liberalization in China has been accelerating in the past 12 months. A number of key changes (MSCI roadmap, RQFII expansion to Paris, Shanghai/Hong Kong Connect, “New National Nine Rules”, etc.) announced in the past 3 months. The timing and magnitude of these changes exceed the expectations of many investors.
Three possible outcomes from MSCI’s annual market classification review.
While China has made significant progress in opening up its capital market, obstacles still exist. We see three possible outcomes from this review. The first is that MSCI will confirm the proposed roadmap to include China A shares in May 2015. MSCI may also continue to exclude China A share at this time, and will review it again in the next review in June 2015 (then the implementation will be in May 2016). Another option is to postpone the decision to December this year for implementation in November 2015. Our view is all three outcomes are likely, but the last one is a better solution.
Index inclusion may act as a positive catalyst to the A share market
China’s equity market has been under pressure recently. Year to date, CSI300 and FTSE China A50 have been down 8.4% and 6.1% respectively. Inclusion of China A shares in MSCI or other major benchmarks could improve the sentiment and provide significant support for the market going forward. We estimate the proposed 5% inclusion could potential attract over $7bn inflow to China A shares. Other benefits include shift in investor base toward long-term institutional investors, and a boost in liquidity in equity markets.
Korea and Taiwan are unlikely to be upgraded to DM in MSCI.
We believe the most likely scenario is that MSCI will maintain these two countries in the EM index at this review, while we cannot completely rule out the possibility of an upgrade given the subjective nature of the assessment
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