LISTED PRODUCT NEWS
EUROPEAN ETFS ENJOY NET INFLOWS
Data provided by iShares, the ETF provider, found that there were more than $226m of net inflows to European sector ETFs that track the Eurostoxx 600 last week. The largest flows went to industrial goods and services, which had $103m of inflows. Utilities experienced the second largest flows of $50m. However, banks experienced net outflows last week to the tune of $87m. Since the beginning of the year, total outflows from ETFs have reached $457m, with $237m coming just from the banking sector. The telecommunications sector has had the second largest outflows of $212m. However, Europe’s media sector has been the most popular with ETF traders. It has experienced net inflows of $232.8m since the start of the year.
NEW PRODUCTS LAUNCHED
Listed products traders can add 10 more covered warrants to their trading shopping lists. Investment bank Societe Generale has added a total of 112 new covered warrants in the past month. The latest products include call and put options on BP that expire in December 2011, calls and puts on Royal Bank of Scotland also with expiry in December next year, two call warrants on the FTSE 100, both of which expire on 17 December 2010, and a call and a put warrant on sterling-USD dollar. SocGen has also recently launched covered warrants for aluminium, copper, gold, the S&P 500, platinum and an agricultural warrant.
SURVEY IS UPBEAT FOR ETFS
The latest BlackRock survey of the ETF industry for the second quarter was released this week and it was upbeat about the future for the ETF industry in Europe. It found that ETFs remain a competitive product for investors – the average total expense ratio (TER) for equity ETFs in Europe are 40 basis points. This compares with 91 basis points for equity index funds and 180 basis points for an average equity fund. The most popular underlying asset class was fixed income, which has more than 20 per cent of all ETF assets. The second most popular asset is individual country equity indices with 14 per cent of total ETF assets.
Innovation remains rife: since the start of the year there have been 135 new ETF product launches across Europe and 65 are currently in the pipeline. But the market for these products remains fairly concentrated, with only three main players. ETF provider iShares remains the largest, with more than 35 per cent of total market share, 173 products and a total of $77.9bn in assets. Lyxor follows with a nearly 20 per cent market share and db x-trackers has 135 products and a 16.5 per cent market share. Although net sales of mutual funds in Europe raised $73.5bn during the first five months of 2010, ETFs are nipping at their heels. Total ETF sales over the same time period were $23.6bn. BlackRock predicts that global ETF assets will grow by 20-30 per cent in 2010. In Europe there were 961 ETFs at the end of the second quarter, with assets of $218bn.