Current Trends: In the current market turmoil investors are becoming even more concerned about counterparty risk, transparency, liquidity and the use of derivatives and structured products. As a result, the use of ETFs to implement exposure to cash, fixed income, commodities and equity indices is …
becoming more popular. Inflows into ETFs continue despite many markets continuing to fall during November – the S&P 500 was down another 7.5% in November. In Europe mutual funds and hedge funds continue to see outflows.
In Europe net sales of mutual fund (excluding ETFs) were minus $505,758 million while net sales of ETFs domiciled in Europe were positive $61.639 million during the first 10 months of 2008 according to Lipper Feri.
Hedge funds are expected to see 35 – 45% shrinkage in hedge fund assets by January 2009 from June 2008. Europe and Asia funds are likely to be more heavily impacted at first according to Huw van Steenis an analyst at Morgan Stanley.
The use of ETFs is likely to increase significantly by independent financial advisers (IFAs) in the UK based on the regulatory proposals outlined on November 25th in the Retail Distribution Review (RDR) feedback statement by the UK’s Financial Services Authority (FSA).
Global ETF and ETP Industry 2008:
At the end of November 2008 the ETFs industry had 1,539 ETFs with 2,580 listings, assets of $633.83 billion, managed by 86 managers on 42 exchanges around the world. Assets fell by 20.4%, which is less than the 43.80% fall in the MSCI World index in USD terms. The number of ETF s have increased 31% YTD. The average daily trading volume in US dollar has increased by 94% to US$117.5 billion YTD.
# ETFs increased by 31% with 414 new launches YTD.
Standard and Poors (S&P) ranks 1st with US$184.32 Bn in ETF AUM tied to their benchmarks, while MSCI ranks 2nd with US$119.25 Bn, followed by Russell in 3rd with US$47.97 Bn.
There are currently plans to launch 570 new ETFs.
Additionally, there were 274 other ETPs (Exchange Traded Products) with assets of US$48.19 Bn from 28 managers on 15 exchanges.
European ETF and ETP Industry 2008:
At the end of November 2008 in Europe there were 29 managers of 595 ETFs with 1,474 listings and US$124.87 billion in assets officially listed on 19 exchanges.
During 2008 YTD, ETF AUM in Europe has fallen by 2.8% which is less than the 50.56% fall in the MSCI Europe index in USD terms.
In Europe, ETFs providing exposure to Fixed Income are the most popular with 27.4% of the assets followed closely by ETFs covering European Country indices with 18.4% of the assets.
During 2008 YTD, 179 new ETFs were launched in Europe. April 11th marked the 8th anniversary of the first ETFs in Europe.
There are plans to launch 38 new ETFs in Europe.
Additionally, there were 124 Exchange Traded Products (ETPs), assets of US$6.19 Bn, with 374 listings from two providers on six exchanges. YTD, ETP Assets in Europe have increased by 26.7% to US$6.19 Bn at the end of November 2008.
U.S. ETF and ETP Industry 2008:
At the end of November 2008 in the United States there were 19 managers of 668 ETFs, with assets of $443.83 USD billion officially listed on 3 exchanges.
At the end of November 2008, 130 new ETFs have been launched in the US.
During 2008 YTD, AUM in US listed ETFs fell 23.6% which is less than the 39.64% fall in the MSCI US index in USD terms.
January 29th marked the 15th anniversary of the SPDR in the US.
On April 11th 2008, the first Active equity ETFs which must disclose their portfolio holdings were listed.
There are plans to launch 469 new ETFs in the US.
Additionally, there were 139 other ETPs (Exchange Traded Products) with assets of US$41.23 Bn from 18 providers on 2 exchanges.
Source: ETFWorld.com – ETF Industry Preview As of end November 2008 by Barclays Global Investors – Deborah Fuhr
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