ETFs - Assets Under Management (03/2012 – 03/2013) 350
Equity
300 250 200 150 100 50 0
Source: Lipper
Bond
Rea l Esta te
Other
Commodities
Money Ma rket
Assets Under Management Assets under management grew by 38.89 billion euro or 14.37% over the last twelve month (31.03.2012 – 31.03.2013) up to 309.48 billion euro.
In Q1-2013 the assets under management grew by 4.36% or 12.92 billion euro.
Source: Lipper
Largest ETFs by Assets Under Management (31/03/13)
Name iShares DAX® (DE) iShares S&P 500 USD SPDR Dow Jones Industrial Average ETF Trust db x-trackers DAX UCITS ETF iShares Barclays 1-3 Year Treasury Bond Fund Market Vectors Gold Miners ETF iShares MSCI Japan Index Fund iShares MSCI Emerging Markets USD iShares FTSE China 25 Index Fund iShares FTSE 100 GBP
Lipper Global AuM in Million EUR Equity Germany 13,767.62 Equity US 9,174.31 Equity US 8,754.92 Equity Germany 6,979.02 Bond USD Short Term 5,825.86 Equity Sector Gold&Prec Metals 5,790.90 Equity Japan 5,578.69 Equity Emerging Mkts Global 5,540.33 Equity Greater China 5,262.20 Equity UK 4,603.65
Summary Assets Under Management The European ETF market is highly concentrated Only 54 of the 1782 ETFs hold assets above 1 billion EUR 32 equity funds 11 bond funds 9 commodity funds (8 gold, 1 silver) 1 money market funds 1 real estate linked equity fund
Source: Lipper
Summary Assets Under Management The largest ETF (iShares DAX) holds 4.45% of overall AuM
Top 10 ETFs account for 24.47% of overall AuM
Top 54 ETFs account for 51.70% of overall AuM
Source: Lipper
MARKET STRUCTURE
ETFs in Europe by Fund Domiciles (31.03.2013) Bond
Ge rmany
115
30
78
1
3
2
1
France
372
48
260
8
8
3
45
Ire land
552
120
368
26
10
5
23
Luxembourg
579
77
341
29
10
17
105
O the r
164
18
55
73
5
-
13
1782
293
1102
137
36
27
187
#
Equity
Other 9%
C ommoditie s
Real Estate
Germany 6%
France 21%
Luxembourg 33%
Source: Lipper
Ireland 31%
Money Marke t
O the r
Total
ETFs in Europe – by Fund Type (31.03.2013) 1330
1400
1200
1000
800
600
452
400
200
0
Primaries Non-Primaries
Source: Lipper
Market Share per Asset Type 31.03.2013 by Number of Funds Equity 62%
Other 10%
by Assets under Management Bond 19%
Money Market 2% Commodities 8% Real Estate 2%
Real Estate 1% Other 3% Money Market 2% Commodities 9%
Bond 16%
Equity 66%
Source: Lipper
Market Share by Replication Method (31.03.2013) Physical Replication 64%
Synthetic Replication 36%
Source: Lipper
Summary Market Structure Luxembourg and Ireland are the dominat domiciles for ETFs followed by France. Opposite to other UCITS products, the number of convenience share classes is low in the ETF segment. Physical replication is the preferred replication method. The product mix by AuM follows the number of funds (exception „other“ funds). Source: Lipper
NEW FUND LAUNCHES Q1/2013
Monthly ETF Launches (01.01.2007 - 31.03.2013) 80
1600 Sum of New Funds
70
1400
60
1200
50
1000
40
800
30
600
20
400
10
200
0
Source: Lipper
0
Sum of New Funds
New Funds per Month
New Funds per Month
ETFs în Europe – New Launches per Quarter 120
100
80
60
40
20
0
Source: Lipper
New ETF Launches Q1 - 2013 Equity 86% Bond 9% Real Estate 5%
n = 23 Source: Lipper
New ETFs – Assets under Management (in Million Euro) 450
Equity
400 350 300 250 200 150 100 50 0
Source: Lipper
Bond
Real Estate
Other
Commodities
Money Ma rket
Summary Fund Launches The number of new launched ETFs in Q1 - 2013 is rather small compared with the launching activity of fund promoters over the last five years … … but as the number of fund launches has come down since Q3 – 2012 the launch pattern might have changed in general. A reason for this can be seen in the low number of asset classes which are not already covered by ETFs. Source: Lipper
FOCUS Q1-2013: STRATEGY ETFS
ETFS WITH RISK CONTROLLED STRATEGIES
Risk Controlled Strategies Risk controlled strategies try to minimize the overall risk (volatility) of an index (benchmark/portfolio) by using an alternative approach for the weighting of the constituents within the index. Minimum variance: Reduction of the overall risk of an index, by excluding constituents with high volatility. Equal risk weighting: All constituents of the basis index are weighted by their risk (volatility) contribution.
Source: Lipper
Timeline of Fund Launches 30
Number of New Products 25
20
15
10
5
0
Source: Lipper
Sum
27
Assets Under Management (in Billion Euro) 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0
Source: Lipper
Summary Risk Controlled Strategies Relatively new segment within the European ETF market.
There are 27 products available – covering developed and emerging markets with different strategies, e.g. minimum variance/volatility and equal risk contribution.
774 million Euros assets under management (Average TNA 28.66 million euro).
Source: Lipper
Summary Risk Controlled Strategies The largest ETF (OSSIAM ETF US Minimum Variance EUR) holds 143.20 million euro (18.51% of overall AuM)
Funds need to increase assets under management and market liquidity to become even more attractive for all kind of investors.
Transparency on strategies and holdings, as well as superior returns will be key for the future success. Source: Lipper
LONG – SHORT ETFS
Long/Short ETFs – Assets Under Management (Billion EUR) Short/Leveraged Short
6 5.5 5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0
Source: Lipper
Leveraged Long
FOCUS: LONG – SHORT EQUITY ETFS
L/S Equity ETFs – Assets Under Management (Billion EUR) Short/Leveraged Short
5 4.5 4 3.5 3 2.5 2 1.5 1 0.5 0
Source: Lipper
Leveraged Long
Long/Short Equity ETFs – Potential Market Impact Short/Leveraged Short
Leveraged Long
100%
90%
80%
56.22%
70%
66.10% 60%
50%
40%
30%
43.78%
20%
33.90% 10%
0% by Assets under Management
Source: Lipper
by Exposure
Summary Long/Short Equity ETFs 35 leveraged long funds available Average AuM 40.07 million euro. Largest fund Lyxor ETF Leverage CAC 40 (TNA 287.85 million euro).
Source: Lipper
Summary Long/Short Equity ETFs 42 short funds available Average AuM 44.51 million euro Largest fund db x-trackers Short DAX Daily UCITS ETF 1C (TNA 496.51 million euro)
Source: Lipper
Summary Long/Short Equity ETFs 17 leveraged short/double short funds available Average AuM 50.94 million euro Largest fund Lyxor ETF CAC 40 Daily Double Short (TNA 264.38 million euro)
Source: Lipper
Summary Long/Short Equity ETFs In terms of assets under management the segment is still to small to make predictions on investors sentiment … … but there are some funds within the different segments that have already a reasonable size and therefore might be used by professional investors to gain directional market exposure. A wider usage of these products may lead to a new indicator for investor sentiment in the future. Source: Lipper
SUMMARY
Summary The European ETF market is highly concentrated and will not change this pattern in the foreseeable future. AuM in the European ETF sector will continue to grow growth rate will be lower than in the past impact from market movements will increase
Number of funds will also grow further not all markets have already covered by ETFs strategy ETFs may become more important
ETFs on bond markets and investment strategies might become the key driver for future growth Source: Lipper
Summary The overall ETF landscape in Europe might change: new/different ETF promoter will enter the market established promoter will leave the market fund launches, as well as closures and mergers will change the product ranges with a trend to more granularity. new distribution models might be introduced
