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US ETPs experienced strongest ever January


US ETP flows were the strongest ever for January last month with USD28.0bn in inflows, according to Deutsche Bank’s latest monthly review of the sector. This figure is the fifth all time high monthly flow since 1993.

Within long-only ETPs, flows were +USD27.0bn in January vs. +USD16.0bn in Dec.

Investors flocked to equities with inflows of USD18.0bn from long-only ETPs; while pouring USD7.9bn and USD1.5bn into fixed income and commodity long-only ETPs in January.

Risk-on segments were the most favoured by the January rally, adding significant inflows to US-focused equity (+USD11.4bn), corporate debt (+USD7.9bn), and EM broad equity (+USD5.0bn) products.

Among equity sectors, Domestic and Global Cyclicals ETPs recorded inflows of USD2.0bn and USD1.7bn, respectively; while Defensives had outflows of USD0.5bn. In terms of size allocations, Large Caps had USD5.6bn in inflows.

Within fixed income long-only ETPs, inflows continued to be strong, but this time, rather concentrated in the corporate segment with flows of +USD6.2bn, and a more balance distribution between investment grade and high yield debt.

ETFs continued to grow at a much faster pace than Mutual Funds. At the end of 2011, ETF inflows contributed 12.6% to the annual ETF AUM growth, while only 0.3% of the annual Mutual Fund AUM growth was attributable to new cash.

ETP assets in the US rose by USD88.9bn to USD1.13 trillion last month, accumulating an increase of 8.5% YTD after the first month of the year. Global ETP industry assets rose to USD1.55 trillion, or 8.4% up YTD.

Total monthly turnover decreased by 13.1% to USD1.1 trillion vs. USD1.3 trillion in the previous month. US ETP trading made up 26.9% of all US cash equity trading in January, down from both its recent peak of 37.5% last August and its 3-year monthly average of 30.9%.

The largest decline was on Equity ETP turnover, which dropped by USD167bn or 14.4% to USD1.0 trillion, followed by Commodity products turnover which fell by USD8.2bn, totalling USD72.3bn at the end of January. Meanwhile, Fixed Income ETP turnover rose by USD3.6bn to USD66.8bn last month.

There were 23 new ETFs listed during the previous month.

BATS exchange listed their first ever primary listed ETFs.

The new products cover three different asset classes, and in most cases offer access to market completion, domestic economies, low volatility portfolios, and fixed income strategies.

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