Europe Monthly ETF Market Review; Deutsche Bank Markets Research Global ETP sector again records high net inflows in October
Data as at: 30.10.2015
Global ETP Market In and Outflows:
• The global ETP sector continued to grow during October. After net inflows totaling US dollar 34.2 billion in September, the October figure was US dollar 34.1 billion. The industry now manages US Dollar 2.9 trillion (p. 1, 22).
• The American ETP market in particular was a key driver of global growth. Following net inflows of virtually US dollar 20 billion in September, inflows in October increased to US dollar 28 billion. Once again ETFs on Equity indices made the largest contribution delivering inflows of US dollar 15.8 billion. However, Bond ETFs also made a positive contribution with over US dollar 11 billion. After Commodities ETPs suffered outflows of 0.4 billion in September, the October figure saw inflows of US dollar 0.5 billion. Since the beginning of the year, US ETP inflows total in excess of US dollar 172 billion (p. 3, 22).
• The European ETP market also generated significant inflows. In October it grew by US dollar 7.1 billion following 2 billion US dollar growth the previous month. Indeed, Commodities ETPs successfully turned the corner with growth of US dollar 0.4 billion.
• Conversely, the Asian market recorded net outflows of US dollar 1 billion, after achieving net inflows during September in excess of US dollar 12.2. Both Bond ETPs and Equity ETPs suffered a decline in the Asian market (p. 22).
European ETF Market In and Outflows
Equities:
• Net inflows recorded by the European ETF market during October increased substantially in comparison to September. During the past month, new money of Euro 6.1 billion was invested in ETFs, compared to the previous month’s figure of Euro 1.9 billion. The European ETF industry currently manages a total of Euro 447 billion (p. 12, 22).
• In October European Equity ETFs generated net inflows of Euro 2.5 billion which equates to 40 per cent of all European ETF inflows. The previous month’s net inflows figure for Equity ETFs was substantially lower at Euro 1.6 billion. Continuing the trend, in October most money was directed to developed markets. ETFs from industrialized countries recorded growth of Euro 1.3 billion, while Emerging Markets ETFs achieved Euro 0.8 billion. This signals a turnaround as Emerging Markets had still been suffering outflows during September (p. 22).
• ETFs on the Japanese equity market once again recorded net inflows in excess of Euro 0.7 billion during October, in comparison to the previous month when Japan ETFs suffered outflows of Euro 0.1 billion (p. 22).
• For ETFs on individual emerging markets, China ETFs recorded slight inflows, while ETFs on the Taiwanese and Russian markets registered slight outflows (p. 26).
• At a sector level, Energy was again one of the sectors attracting the highest growth with a plus of Euro 0.12 billion. In addition Consumer Goods ETFs recorded net inflows of Euro 0.1 billion. Strategy ETFs suffered significant outflows of Euro 0.4 billion which included short and leveraged products (p. 23).
Bonds
• October was also a month of significant inflows for Bond ETFs. This segment continued the positive trend from recent months by adding Euro 3.5 billion. As such, Bond ETFs contributed more than one half of the positive cash flow in the European ETF market during October (p. 1, 22).
• ETFs on Investment Grade Bonds attracted the highest inflows with an increase of Euro 2.9 billion. Consequently, total net inflows since the beginning of this year stand at Euro 20 billion. High Income Bonds also recorded positive inflows in October of Euro 0.7 billion bucking the net outflow trend over previous months (p. 1).
Commodities
• In October, European Commodities ETPs again recorded net inflows of almost Euro 0.4 billion, after outflows in September of Euro 0.26 billion. The winners mainly included ETPs on Crude Oil (Euro +0.19 billion) as well as Gold (Euro +0.14 billion) (p. 26).
Most Popular Indices
• The most popular equity indices in October remained the Euro STOXX 50, the MSCI Emerging Markets Index, the STOXX 600 as well as the DAX. The S&P 500 and the MSCI Europe were also in demand (p. 27).
• For Bonds, investors focused particularly on ETFs on Sovereign Bonds issued by Emerging Markets as well as Euro High-Income Bonds (p. 27).