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Europe Monthly ETF Market Review – ETF Investors Positioning in EM Equities

Europe Monthly ETF Market Review – ETF Investors Positioning in EM Equities

European ETP Highlights

As of the end of April 2014, global ETP assets approached $2.36 trillion (€1.7 trillion) where European ETPs experienced +€6.4bn of cash inflows. Equity exposed ETFs benefitted most by gathering +€3.6bn, while fixed income products continued their steady rise from the start of the year by accumulating a further +€2.4bn. Commodity based ETFs listed in Europe saw modest inflows of +€0.3bn.

European ETFs with EM exposure attracted significant flows

Investors trading European ETFs focused their investments outside of Europe, particularly in global Emerging Markets. Our analysis suggests that +€1.2bn flowed into EM despite the on-going political turmoil in Russia and Ukraine. iShares MSCI Emerging Markets UCITS ETF (IEEM LN) commanded the top spot for the month for net inflows gathering +€342mn.

Investors channelling money into equity yield

The dividend theme was also a highlight for ETF investors in April as it gained +€450mn of cash inflow. Investors showed a preference for US and Global dividend indices as indicated by the top dividend ETFs attracting flows. The S&P US Dividend Aristocrats and STOXX Global Select Dividend 100 were popular benchmark choices with investors.

UK the preferred investment in Europe

The UK equity market was the main driver for the strong European equity market performance in April. The FTSE 100 was up over 3% and MSCI UK was up over 4% on the month. This was supported by flows into ETFs tracking the FTSE 100 and MSCI UK. UBS ETFs tracking MSCI UK experienced significant inflows where investors also chose to invest in currency hedged versions of the ETFs. This demonstrates investor caution on the strength of Sterling. Inside we highlight the ETFs concerned.

Steady flows into Sovereigns, Gold ETPs in Europe countering trend in US

The flow into fixed income products have been steadily increasing since the start of 2014. April saw another stellar month for fixed income ETFs where Sovereign based ETFs received over +€1.4bn of inflows.

In spite of over -$1bn of outflows from US based ETPs tracking gold, investors trading European ETPs sought safety by pilling in over +€170mn (+$239mn) in gold products.

Europe Monthly ETF Market Review – ETF Investors Positioning in EM Equities

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Välkommen till investeringskväll om ETFer

Välkommen till investeringskväll om ETFer. Varmt välkommen till en spännande helkväll om börshandlade fonder, ETF:er. Vi inleder kvällen med makroanalys av SEBs chefekonom Robert Bergqvist, som ger oss en uppdatering av vad som händer i världen.Därefter ger vid dig en kortare föreläsning om börshandlade fonder och förklarar hur de handlas hos Nordnet. Kvällen avslutas med en paneldiskussion där proffsen från fondbolagen ger dig värdefulla tips och strategier för hur börshandlade fonder kan
användas i din portfölj. Välkommen till investeringskväll om ETFer.
Kvällens konferencier är Helena Wedin från NASDAQ OMX.Agenda:17.00 Lättare förtäring17.30 Välkommen och kort introduktion till kvällen, Helena Wedin, NASDAQ OMX

17.40 Vad händer i vår omvärld och hur påverkar det vår ekonomi? Robert Bergqvist, Chefekonom, SEB

18.15 Vad är en ETF och hur handlas den? Peter von Euler, Xact Fonder, Stephan Agerman, Deutsche Asset & Wealth Management och Alexander Tiainen, Nordnet

19.00 Paus

19.15 Panel: Att investera i ETF:er – hur ska jag tänka? (Moderator Helena Wedin, NASDAQ OMX, tillsammans med representanter från Xact Fonder, Deutsche Asset & Wealth Management och SEB)

19.45 Avslutning

Datum och Tid: Onsdag 7 maj, 17.00 – 20.00

Plats: Clarion Hotel Sign, Norra Bantorget, Stockholm

Förtäring: Wrap, mineralvatten, kaffe.

Självklart är eventet kostnadsfritt och du får gärna bjuda med en vän. Antalet
platser är begränsade så först till kvarn gäller. Anmäl dig därför redan idag.

Varmt välkommen!

Vänliga hälsningar,

Nordnet

Europe Monthly ETF Market Review – €550m into Southern Europe, €1bn out of Euro STOXX 50

Equities in Developed Europe saw a pull-back in March, underperforming both the US and Emerging Markets. This was driven primarily by poor equity market performances in the UK and Germany. ETF cash flows reflected this performance where we observed c.€1bn of net outflows from the equity asset class while the fixed income asset class continued to see inflows (+€1.9bn). Despite this set back, our strategists remain constructive on Europe and have recently upgraded their target for the FTSE 100.

Significant investment pulled out of Euro STOXX 50

The bulk of the equity outflows in Europe were from ETFs tracking the Euro STOXX 50 index where we observed approximately €1bn of outflows. This was the largest redemption among any of the segment or sub-segment level for the month of March.

Southern Europe continue to attract more inflows

ETFs with Southern Europe exposure countered the broad market trend for the month by seeing continued inflows in March. The net cash inflow almost doubled the monthly inflow we observed in February indicating investors’ conviction on further equity upside for the region. ETFs listed in Europe with exposure to this region saw over +€550m of inflows in March. A similar trend is also observed in the US, implying that US investors are sharing the same sentiment.

EM equities saw outflows despite strong market performance in March

MSCI Emerging Markets was up just over 3% in March which brought its YTD performance to almost flat. Despite this rebound in performance, ETFs tracking broad Emerging Market indices experienced net outflows (-$211m in Europe, – $48m in US) suggesting investors are still maintaining their cautious view on the region in anticipation of further tapering in the US.

Large flows into Fixed Income ETFs

Similar to previous month, investors trading European listed instruments exercised caution by channelling another +€1.9bn into fixed income ETFs (+€1.9bn in Feb). However, this time corporates edged over sovereigns in contrast to the previous month.

DeAWM completes switch of 18 funds from synthetic to physical

Deutsche Asset & Wealth Management (DeAWM) announced last year its plan to convert 18 large synthetic based ETFs to physical over a period of 6 months during 1H 2014. DeAWM has now completed this exercise for all of these ETFs. The set of 18 funds make up a total AUM of close to $10bn and post this switch, physical based ETF market share have now moved to 71% from 67% at the end of last year.

Vanguard dominates cash flows globally

Vanguard ETFs have been accumulating notable inflows across various products this year. Year to date, we have observed +$13.1bn of net inflows into Vanguard US listed products which represented 90% of the total US ETP net flows. In the US, Vanguard has now edged closer to second place on the provider rankings table, closely behind State Street. State Street, in contrast, experienced -$18bn of outflows this year, primarily from its flagship product SPDR S&P 500 ETF (SPY US) as cautious investors took profits from US equity markets.
As widely known, Vanguard ETFs offer cost efficiency where the total expense ratios (TERs) for most of its ETFs are much lower than other large players in the US markets. Vanguard ETFs’ asset weighted TER is 0.11% in comparison to 0.32% and 0.20% for BlackRock and State Street respectively.

Download the complete report Europe Monthly ETF Market Review – €550m into Southern Europe, €1bn out of Euro STOXX 50