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ETF flows flat as investors hope for resolution of the European debt crisis


Flows in the European ETF industry have ground to a halt in anticipation of [hopefully positive] developments relating to the European debt crisis. The week that ended on 21 October was very quiet with ETF flows very close to flat (outflows of EUR18 million). ETCs were closer yet to flat, with total outflows of EUR8 million.

Within asset classes, the picture was similar with equity ETFs netting total weekly outflows of EUR36 million, fixed income ETFs registering outflows of EUR68 million and commodity ETPs gaining EUR16 million. There were no clear directional cash flow trends this week.

Total European ETP assets decreased by 0.5% and ended the previous week at EUR226.6 billion. Equity ETFs lost 0.1% [EUR177 million], largely due to equity market declines. The Euro Stoxx 50 index lost 0.8%, the DAX gained 0.1%, the CAC lost 1.5% and the FTSE gained 0.4%. Fixed income ETFs gained 0.1% [EUR35 million] and commodity ETPs lost 2.3% [EUR1.0 billion], largely due to the decline of the price of gold [-2.5%].

Weekly on-exchange ETP total turnover decreased by 14.4% this past week [21/10/11], following the decrease of 17.7% in the prior week [14/10/11]. Equity ETFs led the decline in turnover, decreasing by 19% from the previous week’s levels, totaling EUR9.5 billion. Fixed income turnover was also lower, by 6.6%, totaling EUR1.2 billion. Commodity turnover increased by 11.7% and reached EUR1.3 billion for the week that ended 21 October.

StateStreet launched two equity dividend ETFs, one targeting emerging markets and the other the US [S&P 500] equity market. These ETFs were launched on the Deutsche Boerse and were also cross-listed on the London Stock Exchange. * Comstage launched two equity ETFs, one targeting the F.A.Z index and the other the MSCI Emerging Markets Total Return index. The F.A.Z index comprises 100 companies headquartered in and listed on a regulated stock exchange in one of the Euro-zone countries. The weights of the countries in the F.A.Z. index are based on the ratio of their [country’s] GDP. Lyxor launched an equity ETF providing daily double leveraged exposure to the Spanish IBEX index. The ETF has been launched on Madrid’s Bolsas y Mercados Españoles (BME).

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