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US ETP AUM up USD67bn driven by inflows of USD37bn

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Exchange-traded product assets in the US rose by USD66.9bn to USD1.28trn last month, reaching a new all-time high and boosting AUM growth to a decent 22.7 per cent growth on a year-to-date basis, according to Deutsche Bank.



Global ETP industry assets rose to USD1.75trn, or 22.0 per cent up YTD.

US ETPs experienced inflows of USD37.3bn during September (+USD130.7bn, 12.5 per cent of last year’s AUM).

Within long-only ETPs, total flows were +USD37.3bn in September vs. +USD3.6bn in August. Equity, fixed income, and commodity long-only ETPs experienced cash flows of +USD31.1bn, +USD3.0bn, and +USD3.0bn, respectively.

Contrary to the apparent disconnect seen between returns and flows in August, September marked a clear comeback to risk. Risky assets experienced significant rallies, and flows were consistent with the market trends.

The risk-on trade was clearly described by the long-only ETP flows demographics. There were very strong flows into equities, with most going into the US (+USD23bn), but also spreading significantly into EM ETPs +USD4.6bn). Sector allocations favoured cyclicals (+USD4.8bn) over defensives (+USD0.6bn). High-beta segments such as small caps also saw significant inflows (+USD3.6bn), while lower-beta categories such as dividend ETPs saw less inflows than in recent months. Within fixed income, investors favoured corporates, especially HY credit, while they moved away from generally safer sovereign debt positions. Gold had significant inflows, but this time they were driven by currency devaluation protection rather than by fear.

There were five new ETFs and one ETN listed during the previous month. Five of them were listed in the NYSE Arca, with the remaining one in the Nasdaq. The new products focus on equity allocations, but offer access to new segments and quantitative strategies.

ETP turnover totalled USD1.02trn last month, up 5.2 per cent (USD51.0bn) from the previous month’s figure of USD0.97trn, and also 38 per cent under last year’s monthly average of USD1.65trn.

ETP trading made up 25.4 per cent of all US cash equity trading in September, down from last year’s peak of 37.5 per cent in August and still below its three year monthly average of 29.0 per cent.

Equity and commodity ETPs turnover rose by USD36.3bn or 4.3 per cent and USD14.6bn (24.9 per cent), respectively; meanwhile fixed income ETPs turnover fell 4.7 per cent (USD3.3bn) during last month.

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