Exchange-traded product assets in the US dropped by USD12.2bn to USD1.27trn last month and are up 21.6 per cent year-to-date, according to figures released by Deutsche Bank.
Global ETP industry assets meanwhile pulled back to USD1.74trn, or 21.5 per cent up YTD.
US ETP flows experienced inflows of USD2.8bn during October (+USD133.6bn YTD, 12.8 per cent of last year’s AUM). Within long-only ETPs, total flows were +USD2.8bn in October vs. +USD35.4bn in September. Equity, fixed income, and commodity long-only ETPs experienced cash flows of -USD4.7bn, +USD5.9bn, and +USD1.9bn, respectively.
After a couple of months of strong risk-on momentum, investors booked profits during October by pulling out from US-focused equity products (-USD11.8bn). In addition, flows suggest that the appetite for risky assets also decreased within the credit space with HY ETF flows ending about flat and IG fund flows attracting most of the new assets (+USD4.0bn). However the flow figures do not suggest a straight flight to safety, but rather a rotation within risky assets coupled with a search for downside protection. For example, corporate debt products (+USD3.3bn) were preferred over sovereign (-USD0.6bn); and within equity, international exposure ETFs still received strong inflows such as the USD1.3bn received by China-focused products.
ETP turnover totalled USD1.08trn last month, up by 5.8 per cent (+USD59.4bn) from the previous month figure of USD1.02trn, but still 34 per cent below last year’s monthly average of USD1.65trn.
ETP trading made up 25.4 per cent of all US cash equity trading in October, down from last year’s peak of 37.5 per cent in August, and still below its 3-year monthly average of 29.0 per cent.
Equity and fixed income ETPs turnover rose by USD73.2bn or 8.4 per cent and USD4.0bn (6.0 per cent), respectively; meanwhile commodity ETPs turnover fell 20.9 per cent (-USD15.3bn) during last month.
There were 11 new ETFs and two new ETNs listed during the previous month. Twelve of them were listed in the NYSE Arca, with the remaining one in the Nasdaq. The new products were mostly focus on core equity exposure across regions and quantitative strategies.