Deutsche Bank – Synthetic Equity & Index Strategy – Europe. European Monthly ETF Market Review – Inflows into European Equities Despite Greek Crisis. Data in this report is as of 30th June 2015
European ETP Highlights
As of the end of June 2015, global ETP assets stood at $2.8 trillion with European ETP assets amounting to $499bn (€448bn). Equity ETFs registered inflows of +€2.8bn which were partly offset by outflows from Fixed Income ETFs (-€1.1bn) during the month of June. Commodity ETPs listed in Europe saw outflows of -€0.2bn.
European equities, particularly German equities favoured over US equities
European equities were, again, preferred over US Equities, both among European and US investors. European equities exposed ETFs gathered over +€3.3bn of inflows compared to +€164mn of inflows into ETFs exposed to US equities. In both listing regions, German equities commanded significant inflows.
Fixed income ETFs experience outflows for the second consecutive month
The selloff in bond markets which had started in late April continued in June resulting in bond yields to rise to its highest level for the year in early June. Correspondingly, European fixed income ETPs saw net outflows for the second consecutive month in 2015 (-€1.1bn). This was driven mainly by sovereign and corporate bonds based ETFs.
Greece crisis triggers significant increase in Greek ETF turnover
Greece focused ETFs listed globally saw an increase in on-exchange activity as the Greek crisis escalated in June ($506mn of turnover in June vs $262mn in May’15). However, total assets remained flat during the month ($563mn). Greek ETFs listed in Europe halted trading on June 26th but an ETF listed in US (GREK US) has continued to trade despite the Greek stock market closure in late June.
China outflows continue as equity markets sell off
Since mid June, the Shanghai Composite Index had lost over 32%. This rout had resulted in China focused ETFs listed globally to experience -$3.3bn of outflows in June (-$18bn so far this year).
New thematic, smart beta and currency hedged product launches
Source launched two thematic ETFs that provide exposure to European and Japanese exporting companies while Lyxor launched two min variance ETFs on the FTSE Developed Europe and FTSE Emerging benchmarks. Several currency hedged ETFs (details on pg 7) were also launched by UBS and Blackrock.