Strong markets in the US, which pushed the S&P 500 1.9% up, lured flows into US-focused ETPs, helping to offset the huge asset exodus driven by EM products, according to Deutsche Bank’s US ETF Market Weekly Review. Other DM markets also contributed with inflows.
Total US ETP flows for the last week registered USD2.9bn of inflows vs USD1.8bn outflows the previous week, setting the YTD weekly flows average at USD2.0bn. US ETPs AUM continues to grow gradually but steadily beyond the trillion dollar mark reaching USD1.03 trillion at the end of last week.
From a geographic focus, long-only Equity ETPs in the US, and in other DMs gathered more than enough new money (+USD3.0bn, and +USD1.7bn, respectively) to offset the cash exodus in the EMs (-USD3.0bn) caused by their plunge last week. In addition, a closer look at the flows into the DM ex US ETPs, provides interesting insights in terms of the trends within the international developed market allocations. At the end of last week, USD2.3bn had been poured into country specific ETPs, and USD1.8bn into regional ETPs since the beginning of the year. Among the top 3 countries by inflows, Japan (+USD723 mm), Canada (+USD569 mm), and Germany (+USD522 mm) have received the largest new allocations in the same period. Within the EM segment we saw spread bearish sentiment among investors, and envision more challenges at the time of finding value in EMs.
Long-only Fixed Income ETP flows stayed calmed last week (+USD167 mm). Corporates led the inflows (+USD219 mm), and Sovereign recorded the largest outflows (-USD99mm). Commodity ETPs experienced a second week of inflows (USD706 mm), with Agriculture ETPs (USD291 mm) leading the way. Please see the weekly commentary section for more details.
There was only one product launched during last week. The new product is listed in NYSE Arca and enables investors to access short leveraged exposure to Inflation in the form of a Fixed Income product.
Total weekly turnover dropped by 3% to USD302bn vs. USD311bn in the previous week, and a 10% down from last year’s weekly average. Equity ETPs recorded the largest absolute decrease with a drop of USD4.9bn, mainly driven by Large Cap ETPs (-USD7.2bn). Fixed Income products turnover didn’t experience significant changes WoW, and remains above 44% up from last year’s weekly average. Finally Commodity ETPs, registered a major drawdown of 19.1% (-3.8bn) following the previous week’s WoW drop of 24%, placing on exchange activity just 5% above 2010’s weekly average. Among Commodity sub sectors, Gold (-USD2.9bn) and Crude Oil (-USD1.0bn) experienced the largest drops.
A strong week in the US and in the developed world brought renewed wealth to ETPs in the form of price appreciation and inflows, enough to outpace the plunge and the outflows in the emerging markets. Total ETP assets increased by 0.7% from the previous week, adding USD6.7bn and reaching USD1.03 trillion at the end of the week. Year to date US ETPs AUM have increased USD32bn or 3.2%.
