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Decreasing outflows as European ETF investors contemplate market direction


In the week that ended on October 14th, European domiciled ETPs registered net cash outflows of EUR360 million, according to Deutsche Banks’ latest weekly review of the sector. Most of the European equity benchmarks ended higher than the previous week’s close: DAX, CAC, Euro Stoxx 50 & the FTSE 100 gained 5.1%, 4%, 3.8% and 3.1% respectively.

This rally extended into precious metals as well with gold and silver prices [US$/oz] advancing by 2.8% and 3.7% respectively, week on week. ETF investors chose to stay on the sidelines and this was reflected in muted cash flows and a dip in on exchange turnover levels.

Commodity ETPs registered cash outflows of EUR283 million over the last week. Gold products attracted cash flows totalling EUR178 million, which were more than offset by outflows from ETFs tracking broad commodity indices [EUR336 million].YTD cash flows for commodity ETPs are now at EUR3.5 billion which represents 9% of 2010 year end assets.

Fixed Income ETFs registered cash outflows of EUR130 million over the last week. ETFs offering credit exposure and those tracking sovereign benchmarks, witnessed an exit of EUR130 million and EUR58 million over the last week. Money market ETFs collected a modest EUR62 million in weekly cash inflows.

Equity ETFs registered flat flows of EUR54 million in the past week taking their YTD flows tally to EUR14.4 billion. Within equities, ETFs tracking emerging market (EM) benchmarks registered cash outflows of EUR276 million in the past week.

European developed country ETFs (mostly Germany) attracted inflows of close to EUR400 million. ETFs offering exposure to developed non-European countries lost EUR147 million in cash outflows over the last week. ETFs tracking European and Eurozone sector products registered positive flows on EUR98 million and EUR47 million respectively.

Total European ETP assets increased by 1.5% and ended the previous week at EUR227.5 billion. Equities gained over EUR4 billion to end the week with EUR137.5 billion in assets. Overall commodity assets ended the week with EUR44.1 billion with a weekly decrease of EUR231 million. ETFs tracking broad commodity indices lost close to EUR229 million in assets, week on week. Fixed income ETF assets declined by close to EUR500 million to end the week at EUR43.8 billion. ETFs with sovereign exposure lost EUR373 million over the past week.  Exchange Total Weekly Turnover: Equity and commodities pull down turnover levels

Weekly on-exchange ETP total turnover decreased by 17.7% to end the week at EUR12 billion. Equity turnover lost over 10% from its previous levels and ended the week at EUR9.5 billion. Commodity turnover almost halved from its previous levels and ended at EUR1.3 billion in weekly totals. Fixed Income turnover lost EUR216 million to reach EUR1.2 billion.


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