ETP growth rate stalls – Markit Securities

The flow of money into European Exchange Traded Products slowed in February, with fixed income seeing the greatest relative decline according to figures from Markit Securities Finance.

Net new flows into European exposed ETPs slowed from $3.2bn in January to $794m in February. This reflects an ongoing flattening of the growth curve since early 2012 when viewed as rolling six-month averages, Markit Securities said.

Between November 2012 and the end of February 2013, the six-month rolling average asset inflow to ETPs with European exposure was around £2.38bn, compared to the peak seen in October 2012 of £3.2bn.

Despite the slower growth in net new flows, investors in Europe continue to be attracrted to ETPs as an alternative to conventional index trackers, Markit Securities said.

This interest is being pushed by the recovery in equity asserts during the latter part of 2012.

“Equity exposed ETPs saw a sharp growth in asset inflow from early August 2012. This peaked in October 2012 with a six month rolling average of almost $2 billion prior to flattening out. This could represent a tactical asset allocation shift as managers use ETPs to adjust exposure with the ability to quickly modify their strategy to changes in the macro environment,” Markit Securities said.

Out of the 986 ETPs with European exposure in its universe, 641 have exposure to equities and 284 are focused on fixed income.

The number of actively managed ETPs is growing. Since July 2012 there have been 21 launches globally of actively managed ETPs, taking the total to 168. However, all of these took place in North America, which begs the question when they will be established in Europe, Markit Securities added.

Active funds with European market exposure


Shorting of European ETPs has fallen from some $2.54bn at the end of 2012 to $1.48bn currently.


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