Deutsche Bank : European Monthly ETF Market Review : Hunt for yield benefit EM Bond ETFs

Assets: European ETPs AUM remained flat on MoM basis and ended the month at €507bn……

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Deutsche Bank : European Monthly  ETF Market Review October 2016

Flows: European domiciled ETPs registered inflows of +€2bn across all major asset classes (equity, fixed income and commodity).

The Fixed Income category benefitted most with inflows of +€1.1bn followed by Commodity ETPs (+€0.6bn) and Equity ETFs (+€0.4bn).

New Product Launches – 23 new products European ETP market witnessed 23 new product launches in September including 17 ETFs and 6 ETCs. Investment Themes for the Month n Broad European equities (e.g. MSCI Europe / STOXX 600), Global EM and US exposed ETFs attracted inflows of +€0.3bn, +€0.8bn and +€0.7bn respectively. n Japan and Germany focused ETFs witnessed outflows of -€1bn, & -€0.2bn respectively. n Smart Beta ETFs reversed its recent trend and witnessed outflows of €0.7bn. n Global EM Sovereign Bonds recorded inflows of +€1.3bn during last month. n Gold ETPs registered inflows of +€0.5bn (+€9bn so far this year).

Turnover: MoM turnover activity up by 9% The total turnover activity into European ETPs was up by 9% (€61bn) from the previous month’s total (€56bn). At the asset class level, on a MoM basis, Fixed Income and Equity ETFs turnover activity increased by 18% and 10% respectively while Commodity ETPs saw decreased turnover activity by -15%. Price premium/discount to NAV monitor The maximum premiums/discounts to NAV in June were observed in the following categories:

Equities: Deepest discount (-0.40%) and highest premium (0.48%) occurred within Sector ETFs.

Fixed Income: Deepest discount in Broad ETFs (-0.23%) while highest premium in Corporate ETFs (0.53%).

US Market: Outflows continues from European focused ETFs European exposed ETFs listed in US had outflows of -$2.4bn (-$1.8bn in Aug’16) during September.

US investors remained cautious over European exposure ETFs so far this year with net outflows of -$21bn in US listed ETFs.