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US ETP assets grew by 11.2 per cent in H1 2012 with inflows of USD72bn


Exchange-traded product assets in the US rose by USD41.4bn to USD1.16trn last month, boosting AUM growth back to the double-digit territory (11.2 per cent) in the first half of the year.

Global ETP industry assets rose to USD1.59 trillion, or 10.5 per cent up YTD.

US ETP flows experienced inflows of USD12.1bn during June, rising by USD72.3bn and 6.9 per cent of last year’s AUM.

Within long-only ETPs, total flows were +USD11.6bn in June vs. +USD5.0bn in May.

Equity, fixed income, and commodity long-only ETPs experienced cash flows of +USD5.1bn, +USD5.1bn, and +USD1.5bn, respectively.

June turned out to be a very fluid month for risky assets as the European sovereigns continued to muddle through the financial crisis and US economic data continued to disappoint. However, things become less pessimistic towards the end of the month and the bottom line turned positive for risky assets.

A closer look at the new equity and fixed income allocations, however, suggest that investors have been rather cautious and have not displayed clear signs of a new trend yet, either bullish or bearish. For example, equity allocations favoured safer bets such as relatively stronger economies (e.g. the US), and diversified regional exposures (e.g. broad EM and DM ex US) rather than country allocations.

In the meantime, new fixed income flows were concentrated on corporate debt products, but heavily inclined to the investment grade segment. And on the commodity space, flows were mixed between safe-haven (e.g. precious metals) and growth-driven (e.g. energy) sectors.

Some of the relevant flow trends of the month were: US equity (+USD4.0bn), investment grade debt (+USD3.3bn), and corporate debt (+USD3.3bn).

There were 10 new ETPs and one new ETN listed during the previous month. All of the products were listed in the NYSE Arca. The new products cover multiple asset classes such as equity, fixed income, commodity, and currency.

Total monthly turnover dropped by 10.1 per cent to USD1.31trn vs. USD1.46trn in the previous month.

US ETP trading made up 29.5 per cent of all US cash equity trading in June, down from both its August 2011 peak of 37.5 per cent and its three-year monthly average of 30.0 per cent.

The largest drop was on equity ETP turnover, which fell by USD144bn or 11.1 per cent to USD1.15trn, followed by commodity products turnover which shrank by USD3.6bn, totalling USD68bn for the month of June. Meanwhile, fixed income ETP turnover slightly rose by USD0.8bn to USD82bn last month.

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