New Trends in the Development of Global Indexing Investment

Transcription

1 New Trends in the Development of Global Indexing Investment, Head of Passive Asset Management, Asia Pacific Client logo positioning

2 ETF Market Trend: Developed Markets

3 ETF asset hits record high Global ETF asset by region (in billion USD) Source: Deutsche Bank, Bloomberg Finance LP, Reuters. * Number of ETPs at the end of the year is net of delistings for the period. ** As of 31 July

4 Developed markets drive the ETP flows 2014 YTD Equity ETP Inflow and Outflow Outflows Inflows US Pan European Japan Other European China Other Emerging Markets Broad Emerging Markets India UK Regional Emering Markets Other Asia Pacific Mexico South Korea US$ Billion Source: Bloomberg, data as of 31 July 2014, for illustration only. It is not an investment advice. 3

5 The trends we mentioned last year: China and Fixed Income

6 2 out of 10 top asset gathering ETPs launched in 2014 are focused in China (17% of AUM) Source: Morningstar, as of July

7 RQFII space has continued to grow RQFII ETF asset growth Source: Morningstar ETF Research, May

8 China s Physical ETFs Lower Tracking Difference Source: Morningstar Direct, Morningstar Research (Data as of end Jan 2014) 7

9 Fixed Income ETFs inflows YTD Global ETF Industry growth attribution in USD million except otherwise stated 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 Alternative Multi Asset Currency Commodity Fixed Income Equity 0-10,000 US EU ($) EU ( ) Asia Source: Deutsche Bank Research, as of end July

10 Fixed Income ETFs continue to gain popularity Global ETF Industry growth attribution Source: Deutsche Bank Research, as of end July

11 Growth potential of Fixed Income ETF Global Fixed Income ETP flow increases substantially from 2013 to 2014 US$ Bn H H Others Investment Grade Corporate High Yield Corporate Government Source: Bloomberg, as of end July H1 refers to January to July. 10

12 How trends are reshaping

13 New China A-Shares ETFs hit the foreign markets Source: Morningstar ETF Research, May

14 More foreign investors start to look beyond large cap CSI 500 Index (Small Cap) versus CSI 300 Index (Large and Medium Cap) Small cap has delivered outperformance over the past 5 years Lower number of state-owned enterprise (SOE) weighting Lower weight of financials 0 Dec-08 Feb-10 Apr-11 Jun-12 Aug-13 CSI 500 Index CSI 300 Index Source: Bloomberg, data as of 15 July Past Performance are not Indicative of Future Returns. Indexes are unmanaged and you cannot invest directly in an index. 13

15 China Fixed Income in demand Broad-based interest in new China products Investors expressed a bias towards policy bonds (33.9%) Corporate bonds carrying strong appeal (20.3%) Interest in small cap equities is also high (13.6%) Source: Deutsche Bank, Asia Risk ETFs Survey

16 A new world imposing new standards

17 More ETFs have switched from synthetic to physical Easier to understand for compliance officers: Physical ETFs, which own all or a portion of the stocks whose performance they track. Lower counterparty risk: Physical ETFs have often restrictions in securities lending Regulatory restriction: The sales of synthetic ETFs are tightly regulated due to their structure 16

18 Rising demand for physical ETFs Physical Synthetic split for European listed ETFs Synthetic Physical Source: Deutsche Bank, Bloomberg Finance L.P, as of 30 July

19 Performance Direct replication ETFs can also deliver outperformance db x-trackers Euro Stoxx 50 vs. benchmark* % db x-trackers Euro Stoxx 50 UCITS ETF (DR) - Income % % % Benchmark 99.90% Nov-12 Feb-13 May-13 Aug-13 Oct-13 Jan-14 Apr-14 Past performance is not a reliable indicator of future results. *The db x-trackers ETF was launched on 28/11/2012. In this analysis db X-trackers has benchmarked its db x- trackers Euro Stoxx 50 UCITS ETF (DR) Income against the two largest ETFs in Europe tracking the Euro Stoxx 50 index in terms of AuM. Source: Deutsche Bank, Bloomberg as of 30/04/2014. Calculation based on historical NAV level, net of fees. 18

20 2014 Asia Risk s ETFs Survey Sponsored by ETFs for the forth year in a row More than 300 institutions in Asia Pacific took part in this annual survey 41% of the respondents will increase their investments in ETFs Will you consider Asian listed ETFs? 10% 15% 7% 33% 33% Yes, unique product range with local flavour 19% Yes, easier trading and settlement 16% Yes, parallel trading hours 16% 20% 15% No, used to trading USand Europe-listed ETFs 10% No, smaller no. of ETFs listed 7% No, lower trading volume Source: Deutsche Bank, Asia Risk ETFs Survey

21 Contact Head of Passive Asset Management, Asia Pacific 20

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