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ETF cash flows point to delineation of investment decisions between US and European investors, says DB


Global ETF industry assets reached USD1.3 trillion [YTD ↑ 6.3%], while the European ETF industry closed the month at EUR211.2 billion [YTD ↑ 0.3%], according to Deutsche Bank’s European ETF Market Monthly Monitor for October. The US ETF industry grew by 6.3% to reach USD945.6 billion over the same period.

European commodity ETPs reached EUR45.3 billion [YTD ↑ 17.1%]. There are currently 290 commodity ETPs in the European market.

Global ETFs gathered flows of USD142.8 billion YTD, EUR18.9 billion of which in the European market. For the month of October, the global ETF industry raised USD26.4 billion of flows, while the European ETF industry experienced minimal
net inflows of EUR83 million over the same period.

The US ETF industry October cash flows were particularly strong, totalling USD24.2 billion, and equity driven [equity ETF inflows USD20.4 billion]. This is a sharply different picture from the prior month, where US fixed income ETFs drove total US ETF flows [USD4.7 billion], signalling a change in investor mood. US fixed income ETFs gathered USD3.8 billion in October, down from USD5.7 billion in September 2011.

The European ETF industry has had a weak cash flow run in October, for a second month in a row, registering nearly flat flows. While European equity ETF outflows in October [EUR469 million] were lower than the outflows in September [EUR978 million] they failed to break into positive territory. European equity ETFs have gathered EUR14.9 billion of inflows YTD, EUR11.2 billion of which went into ETFs tracking the German DAX index.

European fixed income ETF inflows for October totalled EUR232 million, down from EUR554 million of inflows in the prior month. European fixed income ETFs have gathered EUR1.2 billion of inflows YTD.

Global commodity ETPs netted minimal inflows, totalling USD87 million for the month of October 2011. European commodity ETPs gathered inflows of EUR172 million, while US commodity ETPs experienced outflows of USD298 million. Global commodity ETPs gathered USD6.4 billion of inflows year to date, the large majority of which came to European commodity ETPs [USD5.1 billion]. The US commodity ETP market registered inflows of USD318 million YTD.

European ETF turnover1 is 8.8% of the region’s cash equities turnover2 as of the end of October 2011. The equivalent number for the US market is almost four times higher, at 30.6%.

European ETFs comprised 2.8% of the continent’s mutual fund industry, yet ETF cash flows, EUR19.1 billion YTD up to August 2011, comprised 46.1% of unlisted fund flows [EUR41.4 billion]. August was a particularly bad month for European unlisted mutual funds as they experienced total outflows of EUR53.0 billion. Mutual fund industry data as per the European Fund Management Association [EFAMA].

US ETFs comprise 7.7%of the country’s mutual fund industry, yet ETF cash flows, USD73.8 billion YTD up to September 2011, comprised 170% of unlisted fund flows [USD43.4 billion]. Mutual fund industry data as per the Investment Company Institute [ICI].

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