Global ETF News Older than One Year
Deutsche Bank-Synthetic Equity & Index Strategy-ETF Annual Review & Outlook-ETF Assets to Pass $3 trillion
February 9, 2015--Report issued on January 26, 2015
Data in this report is as of 31st December 2014
ETF assets up by 17% reaching $2.64 trillion in 2014 driven by record inflows
The global ETF Industry experienced best growth ever pushing AUM to $2.6 trillion by the end of 2014 reaching a new record. The strong 17% growth was mainly attributable to organic sources (i.e. new money inflows) which made up 14.6%, while price appreciation had a much less significant contribution of 2.7%-definitely different from previous years when both components had contributed almost equally to the overall growth.
The global ETF industry received healthy cash flows during 2014 recording cash inflows for +$328bn which represent significant growth compared to the previous two years in which the industry attracted +$263bn (2013) and +$247bn (2012), respectively. During the last three years equities have stood as leaders contributing the major portion of the inflows, but during 2014 fixed income ETFs also showed significant signs of growth and contributed +$89.3bn in inflows (vs. +$24.4bn in 2013).
The US, Europe, Asia-Pac, and RoW regional ETF assets closed the year at $1.92 trillion (+19%), $438.9bn (+11%), $201.4bn (+20%), and $77.8bn (+5.6%), respectively. Global ETP (including ETC/ETVs) assets grew by 16% to $2.7 trillion last year.
We expect global ETF assets to pass $3 trillion in 2015
We project the industry will continue to grow at a fast pace in 2015. In our base case scenario, assuming a neutral market condition, global ETF assets may grow c.20%: broken down into 11.6% or $305bn growth from new cash flows, and 9% from price appreciation. This growth should put the ETF assets well on their way to $3.2 trillion by the end of 2015. We expect the US ETF market to be the major contributor with similar asset growth (19.5%) and inflows in the vicinity of $230bn. In a bull market case, ETF assets may grow over 30% approaching $3.5 trillion. We expect ETPs (including ETFs and other exchange traded products such as ETVs/ETCs) to experience a similar, but slightly lower, growth rate than ETFs and reach about $3.26 trillion in 2015 in our base case scenario, and pass $3.5 trillion in a bull market case.
ETF flows suggest investors preferred less risky assets
US Equity-focused ETPs played a major role in 2014 as investors took positions to benefit from an improving US economy, allocating $234.5bn to such funds. We saw significant flows going into different segments in fixed income space, but caution was the main theme for the year as investors embraced safer products as their main allocation preference. After suffering what can only be described as the worst year for Commodity-focused ETPs during 2013 from a flows perspective, we saw investors' lack of interest continue during 2014.
Source: Deutsche Bank Markets Research Synthetic Equity & Index Strategy
ETF Securities Research-Precious Metals Weekly-Is that it for Gold? The Stock Market may be Key
February 9, 2015--Gold nears US$1,200/oz. support as stocks rally and volatility declines. Gold had its brief shining moment near US$1,300/oz. resistance a few weeks ago but has continued to back away, nearing US$1,200/oz. support. Friday's unemployment number for January was
indisputably good, but bad for gold.
The precious metals market readjusted to pricing backin some fed tightening. Fed tightening expectations, a year forward, leaped about 14bps last week to a total of about 50bps by the end of February 2016 (see chart below).
The US 10yr yield correspondingly spiked 31bps to 1.95%, which was the sharpest one-week yield increase since the week ending June 21, 2013. Stocks rallied, volatility declined and so did some gold and silver lustre. If these conditions are sustained, the gold price could suffer. Since the beginning of 2015, the S&P 500 has essentially ranged between 2,000 and 2,060. It is ripe to make its next move and it appears the consensus path of least resistance remains up. Moderate economic growth in a low inflation environment has historically been stock market friendly. If the consensus fails and the stock market stumbles and/or volatility increases, gold should be a primary beneficiary.
Source: ETF Securities Research
Fixed income and commodity ETFs/ETPs globally both have 3rd best month gathering net inflows in January 2015, according to new research by ETFGI
February 9, 2015--ETFGI's new research finds overall net new asset (NNA) flows in January were US$12.2 Bn.
Net inflows of US$13.3 Bn into fixed income products and US$5.2 Bn of net inflows of into commodity ETFs/ETPs globally ranked as the third largest months on record for both asset classes while equity ETFs/ETPs suffered net outflows of US$8.0 Bn in January.
The global ETF/ETP industry had 5,585 ETFs/ETPs, with 10,770 listings, assets of US$2.77 trillion, from 242 providers listed on 63 exchanges in 51 countries at the end of January 2015 according to preliminary data from ETFGI's end January 2015 global ETF and ETP industry insights report.
Source: ETFGI
Analysis: Basel III leverage ratio hits derivatives clearing
February 9, 2015--The introduction of a supplemental leverage ratio will hurt derivatives clearing and have other unintended consequences, industry participants say.
"Banks may bear the cost of this rule for you if you are doing a lot of business, but most likely they are going to raise costs dramatically or tell you to go away--and I can tell you that people are getting that 'go-away' conversation already...
Source: SmartBrief
Global pension fund assets reach new highs
DC assets predicted to overtake DB assets in the next few years
February 9, 2015--Global institutional pension fund assets in the 16 major markets grew by over 6% during 2014 (compared to around 10% in 2013) to reach a new high of US$36 trillion, according to Towers Watson's Global Pension Assets Study released today.
The growth is the continuation of a trend which started in 2009 when assets grew 18%, and in sharp contrast to a 22% fall during 2008 when assets fell to around US$20 trillion. Global pension fund assets have now grown at 6% on average per annum (in USD) since 2004.
Source: Towers Watson
Banks Prepare to Charge Fees for Trades at Benchmark Currency Rates
February 9, 2015--Some of the world's biggest currency dealers are preparing to charge clients for trades at benchmark rates, according to people with knowledge of the matter.
Barclays Plc, Deutsche Bank AG, and JPMorgan Chase & Co. have told customers in recent weeks they may start charging fees for trades executed at the WM/Reuters rates, including the 4 p.m.
Source: Bloomberg
BIS publishes indicators of global liquidity and analysis of oil market developments
February 7, 2015--The BIS today released an updated set of indicators of global liquidity, which are intended as measures of the ease of financing in global financial markets.
Alongside the global liquidity indicators, the BIS also published a preliminary analysis of the oil-debt nexus, exploring recent developments in oil markets, and noting that:
recent changes in production and consumption are not enough by themselves to explain the extent and timing of the drop in oil prices. One should consider the nature of crude oil as a financial asset, and consequently its sensitivity to expectations and financing constraints;
view the BIS Global liquidity: selected indicators1 report
Source: BIS
DECPG Global Weekly-February 06,2015
February 6, 2015--Taking Stock
Global bond markets recorded strong gains. The global bond markets started the year on a strong note, with Bank of
America Merrill Lynch's global bond index posting a record 1.7 percent gain in January.
Gains were particularly strong in low-risk government debt as stalling global growth and new quantitative easing by the European Central Bank created demand for safe-haven assets.
U.S. and U.K. government securities have gained 2.6 percent and 3.7 percent this month, respectively, remaining among the best performers worldwide . Global investors' appetite for low-risk corporate debt was also strong, with companies across the world selling $311 billion of bonds in January and average borrowing costs sliding to 2.4 percent, the lowest level since May 2012.
Greek markets tumbled on the ECB move. Greece’s bond and stock markets tumbled on Thursday after the European Central Bank restricted access to funding lines to Greek lenders. By cutting off Greek banks' ability to use (non investment grade) government's bonds as a collateral, the ECB increased the likelihood that deposits withdrawals from banks will accelerate.
Source: World Bank
ETF 20/20 Trends: Swiss 'Shockolates' & The Eurozone Deflation Threat
February 6, 2015--Key Highlights
Our monthly 'ETF 20/20' report summarizes recent Exchange Traded Fund (ETF) trends in the US, using data from the First Bridge global ETF database.
US ETF assets fell inJan 2015 to $1.984T, due to the combination of a market decline and net outflows in US equities
Preliminary estimates from Eurostat indicate that price declines in the Eurozone accelerated in Jan 2015, raising the likelihood of further monetary stimulus
January 2015 was a month of significant volatility in currency ETFs. The Swiss Franc appreciated dramatically against the Euro and USD on Jan 15, when the Swiss National Bank abandoned its policy of pegging the Franc to the Euro.
The year started with a rare month to month decline in the number of US listed ETFs, with 23 closures and 13 launches.
Low volatility outperformed other US equity strategies both in January and the trailing 12 months.
Indian & Chinese equity and long duration bond ETFs were the best performing, while Russian, Greek and energy ETFs were the worst performing in the trailing 12 months.
Source: First Bridge Data
SPDR University Weekly Market Report-
February 6, 2015-ECONOMIES: Manufacturing is lackluster around the G7. Employment rises robustly in the US. Unemployment falls in Canada. The Bank of England leaves policy unchanged. Factory orders jump in Germany. Wage inflation appears to be accelerating modestly in
Japan. The Reserve Bank of Australia cuts its policy rate.
MARKETS: Risk appetites seem to get a boost from the bounce in oil prices. Equities and G7 government bond yields are mostly higher. US and UK yields jump. USD is broadly weaker.
NEXT WEEK PREVIEWED
SPOTLIGHT: Another weak headline is expected for retail sales in the US. GDP likely posts at best anemic gains for Germany, France, Italy and the overall eurozone. Home prices are expected to post another solid gain in Australia.
ECONOMIES: Manufacturing is lackluster around the G7. Employment rises robustly in the US. Unemployment falls in Canada. The Bank of England leaves policy unchanged. Factory orders jump in Germany. Wage inflation appears to be accelerating modestly in Japan. The Reserve Bank of Australia cuts its policy rate.
Source: SPDR University
