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The Impending Profitability Challenge for European Fund Managers
October 8, 2013--Foreward
The financial crisis which commenced in 2007 has been widely acknowledged as the major catalyst to an unprecedented period of change in the Fund Management Industry.
Since then, many unqualified assumptions and urban myths have circulated around the industry relating to the impact of the financial crisis. Certainly the credit crunch, the collapse of Lehman's and the sharp fall in global equity markets triggered structural change in fund management, but there is no clear understanding or consensus as to what those changes have been. Through our work with EY we hope to bring some clarity to the real changes which have taken place across the European Funds landscape over the last six years.
view more view the report-The Impending Profitability Challenge for European Fund Managers Two new ComStage equity index ETFs launched on Xetra
The ComStage ETF FTSE China A50 UCITS ETF enables investors to invest in A-class equities in the 50 largest Chinese companies via an exchange-listed ETF. Bats Lands BlackRock To Start European ETF Exchange FCA launches review into execution-only market DB-Synthetic Equity & Index Strategy-Europe-Europe Monthly ETF Market Review-Fixed Income ETFs dominate cash flows in Europe
Europe: Another €1bn+ mark for fixed income ETFs, equities moderate and commodities recede
Other regions' cash flow summary
US: Equity and fixed income ETFs make strong come back
Asia: Overall fund flows flat, Japan and South Korea focused ETFs witness healthy inflows
EM local bond exposure available in GBP on LSE
The recent market volatility has created entry points for investors looking to make a strategic allocation to emerging markets. The PIMCO EM Advantage Local Bond Index Source ETF offers exposure to local emerging market sovereign debt via the PIMCO EM Advantage Local Currency Bond Index ("EM Advantage"), an innovative, GDP-weighted index, offering exposure to 12 emerging market countries.
Deutsche Borse will be exclusive licensor of BSE market data to international clients The partnership also allows Deutsche Börse to deepen its client service capabilities in important Asian markets such as India, as well as strengthen the strategic alliance between the two exchanges. Crackdown on UK fund market raises alarm Pull closet indexing out of the closet Tradeweb Exchange-Traded Funds Quarterly Update- Q3 2013
ETFs provide access to A-class shares in Chinese companies and the MSCI World Index focused on emerging market countries
October 8, 2013--Two new equity index funds issued by ComStage ETF have been tradable on Xetra since Tuesday. Investors will be able to participate for the first time in the performance of the FTSE China A50 Index and the MSCI World with EM Exposure Net Index.
ETF name: ComStage ETF FTSE China A50 UCITS ETF
Asset class: equity index ETF
ISIN: LU0947415054
Total expense ratio: 0.40 percent
Distribution policy: non-distributing
Benchmark: FTSE China A50 Index USD Preisindex
New Regional Bourse Seeks to End 'Fragmentation' in Market
October 7, 2013--Bats Chi-X Europe, the region's largest equities trading platform, has been endorsed by BlackRock Inc. for its new exchange-traded fund platform.
From next month, the fledgling stock exchange will list two of BlackRock's iShares ETFs as secondary listings: the iShares MSCI Emerging Markets Ucits ETF and iShares MSCI World Minimum Volatility Ucits ETF.
October 7, 2013--The Financial Conduct Authority (FCA) has launched a review of the execution-only market, examining all aspects of the industry including looking at buy lists for the first time.
Investment Week can reveal the regulator- which has previously raised concerns about some practices in the execution-only market, particularly around the retention of legacy commission-is now carrying out a closer inspection of the marketplace.
October 7, 2013--Data in this report is as of 30 September 2013
Global Summary
Markets across the globe reacted positively in September after Federal Reserve's surprise decision to continue with the $85bn monthly bond buying program. Global ETP AUM was favourably impacted by this and rose by $105bn to $2.1 trillion (+14.1% YTD) last month. The European ETP industry ended the month at €289.2bn, +3.2% year-to-date.
Global ETP industry observed very strong monthly cash flows recording +$34.1bn of inflows in September. US domiciled ETFs remain major contributor receiving +$32.4bn of positive flows, followed by Europe with +$1.6bn and Asia with negligible flows. Inflows were seen across the board, except commodities, primarily in equities (+$28.1bn) and fixed income (+$6.7bn).
European cash flow summary
European domiciled ETPs witnessed positive cash flows in September recording +€1.2bn of inflows. Fixed income ETFs had the largest share in total flows registering +€1.2bn of inflows followed by equity ETFs (+€0.3bn), while commodity ETPs experienced outflows of -€0.3bn.
Within equity segments, developed markets (DM) and emerging markets (EM) ETFs remain largest movers of the month although in opposite directions. DM ETFs saw close to -€1bn of redemptions while EM ETFs recorded positive flows for the first time since Jan'13 with +€0.4bn of inflows. Similar to previous month, strategy (+€0.3n), capitalization (+€0.2bn) and sector (+€0.2bn) segments had a positive month in terms of cash flows.
Fixed income ETFs collected healthy inflows of +€1.2bn in September, surpassing +€1bn monthly inflows mark for the third occurrence in 2013. Prior to this fixed income ETFs recorded inflows of +€1bn in January and +€1.7bn in April this year. ETFs tracking sovereign bonds had the lion's share collecting +€1.1bn in cash flows, followed by corporate bonds benchmarked ETFs with +€0.2bn inflows.
Commodity ETPs continue to shrink and recorded outflows of -€0.3bn over the month of September taking YTD total to -€7.9bn. Gold ETPs led the commodity outflows with -€0.4bn of withdrawals (-€7.5bn YTD). Aftermonthly gains for two consecutive months (+6.9% in Jul'13 and 6.84% in Aug'13), gold prices fell in September (-4.73%), resulting in another month of outflows for gold ETP.
US domiciled ETPs witnessed strong monthly cash flows during September with +$32.4bn of inflows. Reversing previous month's trend, equities with majority share collected +$27.5bn in new money and fixed income collected +$5.2bn. Commodity ETPs continued its negative trend and totalled -$0.5mn of outflows.
Within equities, cash inflows were witnessed across the board in September. Primary drivers of the month were ETFs providing exposure to large caps (+$9.1bn), broad global EM (+$4.8bn), broad Europe DM (+$3.5bn), small caps (+$2.7bn), commodity theme (+$2bn), industrials sector (+$1.2bn), and Japan (+$1.2bn). Leveraged long strategy (-$1.4bn) and mid caps (-$1.4bn) ETFs were among the largest cash outflows sub-segments.
Fixed income ETFs recorded cash inflows of +$5.2bn over the month of September. On a segment level, largest movement observed in sovereign and corporate bond ETFs receiving +$2.8bn and +$2.7bn inflows respectively.
Outflows from commodity ETPs were mainly driven by redemptions from gold ETPs. In total -$0.6bn of outflows recorded by gold ETPs taking YTD total to -$23.1bn.
Last month, Asia-Pacific ETP market observed negligible flows (+$12mn) and the YTD monthly flows average remains at +$1.4bn (+$13bn YTD in total flows). Equity ETFs collected inflows of +$240mn and majority of that offset by outflows from fixed income ETFs (-$224mn).
Within equity, on segment level, developed market (DM) benchmarked ETFs led the tally receiving inflows of +$1.3bn, while strategy based ETFs experienced -$1.2bn of withdrawals. On a sub-segment level, major inflows were recorded by ETFs providing exposure to Japan (+$1.4bn), South Korea (+$0.7bn), healthcare sector (+$0.1bn) and financial sector (+$0.1bn). Leveraged long strategy ETFs saw significant outflows (-$1.5bn) followed by ETFs focused on Taiwan (-$0.4bn), China (-$0.4bn) and Hong Kong (-$0.2bn).
Fixed income ETFs recorded -$224mn of outflows in September. Among fixed income ETFs, sovereign ETFs experience largest outflows of -$252mn.
October 7, 2013--PIMCO, a leading global investment management firm and Source, a specialist provider of exchange traded products are pleased to announce that PIMCO EM Advantage Local Bond Index Source ETF can now be traded in GBP on the London Stock Exchange under the ticker EMLP.
The ETF, which was previously tradable in USD only, has assets of US$ 176 million,
New partnership gives market participants easier access to market data and information products of both exchange groups
October 7, 2013--Deutsche Börse Market Data + Services and BSE today announced a partnership under which Deutsche Börse will act as the exclusive licensor of BSE market data and information products to all international clients.
The new cooperation will benefit existing and potential customers by giving them access to both exchanges' market data products under a single license agreement. A signing ceremony was held in Frankfurt on 2 October 2013.
October 6, 2013--The UK financial regulator has met the chief executive of every large fund company as part of a drive to crack down on misconduct in the fund industry.
The news comes after the Financial Conduct Authority fined Aberdeen Asset Management £7.2m for failing to protect client assets adequately, and Axa Wealth £1.8m for mis-selling products to thousands of retail clients.
Fund manager practice is a tax on millions of investors
October 4, 2013--In the UK, people are trying to pull closet indexing out of the closet. It is a fight that could have global implications.
This is one issue on which there is no need to sit on the fence. The debate between..
October 3, 2013--The following data is derived from trading activity on the Tradeweb European-listed ETF platform from 1 July to 30 September 2013.
Volume by ETF asset class
Equity-based ETFs saw a 4 percentage point increase in volume on Tradeweb during the third quarter of 2013 while activity in fixed income and commodity-based ETFs each fell by 2 percentage points.
In contrast to the second quarter, there was a strong buying trend during the period, particularly in fixed income ETFs, which saw an 8 percentage point increase in buys during the third quarter.
