BLACKROCK GLOBAL ETP LANDSCAPE

Transcription

1 BLACKROCK GLOBAL ETP LANDSCAPE MONTHLY SNAPSHOT JANUARY 215 The opinions expressed are as of January 31st, 215 and may change as subsequent conditions vary.

2 Summary BlackRock ETP Research A cross-regional team analyzing global markets to deliver insights on the intersection of investment trends and ETP flows For inquiries, please ETPresearch@BlackRock.com JANUARY ETP FLOWS HIGHLIGHTED BY STRENGTH FOR NON- U.S. DEVELOPED MARKETS EQUITIES AND FIXED INCOME Global asset gathering moderated from recent months to $11.6bn, with significant inflows for Europe equity and corporate bonds diverging from heavy redemptions for U.S. large cap and EM equity The more aggressive than expected ECB quantitative easing announcement was well received by the market, contributing to record flows of $8.4bn for pan- European equity and $13.7bn for Europe-listed ETPs Exchange rate movements, particularly U.S. dollar appreciation against the euro, led to a new monthly high of $6.9bn for currency-hedged ETP flows, which were concentrated in Europe and EAFE equity exposures Equity market volatility, uncertainty surrounding global growth and the ECB stimulus news all supported ongoing demand for fixed income funds, which gathered $13.bn, and kept downward pressure on interest rates Commodity flows accelerated to $5.2bn, the greatest monthly total in nearly five years, due to crude oil inflows following the collapse in oil prices as well as the first significant gold inflows since June Subscribe Global ETP Highlights... 3 Year-to-date Overview.. 5 Reference Schedules To receive the ETP Landscape series of reports, please visit our website: Flows by Listing Region.. 6 Fund Inflows and Outflows. 7 ETP Flows by Exposure.. 8 [ 2 ]

3 Global ETP Highlights Global ETP flows 1 of $11.6bn in January moderated from the pace set in Q4. This was largely due to redemptions of ($18.3bn) for U.S. equity funds, a key driver of last year s record industry growth. The S&P 5 was down 3.1% in January 2, reminiscent of a similar slow start to the year in. KEY INVESTMENT THEMES / ETP FLOW TRENDS By contrast, 215 began with surging demand for non-u.s. developed markets equities, which gathered $18.2bn. Fixed income added $13.bn along with $5.2bn for commodities. Europe equity Japan equity Broad dev. eqty Inv. grade corp. Broad EM eqty China equity Pan-European equity funds brought in $8.4bn, their best month ever, helped by the ECB announcing an open-ended plan to purchase 6 billion euros of sovereign bonds per month. The larger than expected size, lack of firm end date and inclusion of long-term bonds were well received by the market. The euro depreciated against the dollar, with the exchange rate reaching 1.13 dollars per euro. 3 This spurred significant flows into currency-hedged ETPs (see below) across geographic exposures as investors anticipate further dollar strength. Switzerland equity added $.3bn following the SNB s surprise change in policy to allow the Swiss franc to appreciate against the euro. It was the second consecutive month of inflows following the $1.2bn from December. Japanese equity gathered $3.2bn, the second month in a row of significant inflows after news of greater central bank stimulus and Prime Minister Abe s recent election victory. The majority of the flows were again from Japan-listed funds. GLOBAL ETP FLOWS YTD Flows of $11.6bn vs. Flows: $329.6bn Flows (US$bn) (5) U.S. equity Non-U.S. dev. equity EM equity Fixed income Commodities & other Q1 Q2 Q3 Q4 Jan-15 SPOTLIGHT ON CURRENCY-HEDGED EQUITY ETPs The U.S. dollar index (DXY) has risen 18% over the last six months 4 and the dollar is expected to appreciate further in 215. In January alone, currency-hedged equity ETP flows reached nearly half of the total for all of. The global market has surged to $53bn, up from $1bn two years ago. Three key drivers have fueled this growth: GLOBAL CURRENCY-HEDGED EQUITY ETP FLOWS YTD Flows: $6.9bn vs. Flows: $14.3bn 25 2 USD (Europe) USD (EAFE) USD (Japan) Other 2.1 1) General divergence of U.S. economic growth, central bank policy and interest rate expectations with Japan and the eurozone has contributed to currency volatility and increased demand for funds that can protect returns Flows (US$bn) ) The late-212 election of Prime Minister Abe and acceleration of Bank of Japan stimulus, which were catalysts for 213 Japan equity ETP flows of $1.2bn (dollar hedged) and $3.8bn (euro hedged) Jan-15 3) Relative eurozone weakness and long-anticipated ECB stimulus led to dollar-hedged flows of $4.bn in January following $7.bn last year (EAFE funds are also benefitting) [ 3 ]

4 Global ETP Highlights (cont d) Minimum volatility funds brought in $1.9bn, predominantly from U.S. equity exposures. This followed Q4 flows of $2.5bn, 7% of last year s total. The average VIX level over the past month rose to 19., versus 16. during Q4 and 13.5 for the first nine months of. 5 Though U.S. equities overall shed ($18.3bn), a single fund (SPY, the SPDR S&P 5) accounted for ($28.bn) in a sharp reversal from December inflows of $17.8bn. 6 The remaining $9.7bn ex-spy was concentrated in broad market and high dividend yield funds. Broad EM equity remains out of favor. Redemptions of ($2.3bn) were the third in four months following inflows for much of. China equity redemptions accelerated to ($5.5bn) as the A-share market has cooled following a speculation-fueled rally driven by domestic investors. India equity was a bright spot, gathering $1.bn as investors hold out hope surrounding prime minister Modi s reform agenda. Fixed income momentum from a record carried into the new year. Overall corporate bond flows of $6.1bn were the best in three years. The ECB easing had a sizeable impact on Europe-listed flows of $5.1bn, split between investment grade corporate and sovereign bonds. U.S.-listed fixed income asset gathering was also robust at $7.4bn. Flows spanned multiple categories, from Treasuries to corporate bonds (investment grade and high yield) to broad U.S. market funds to municipals. Interest rates pushed lower, with the 1-year Treasury reaching 1.64%. 7 RESULTS AT A GLANCE 1 (US $billions) Jan 215 Dec Jan Monthly Flows (6.7) Assets 2,776 2,797 2,322 # of ETPs 5,42 5,431 5,54 GLOBAL 13-MONTH ROLLING FLOWS YTD flows: $11.6bn vs. Flows: $329.6bn (US$bn) Commodity flows hit a five-year high of $5.2bn. Investors poured $3.6bn into crude oil funds anticipating a bottom to the collapse in oil prices. Gold rallied leading to inflows of $2.3bn in a reversal from five consecutive months of redemptions. Equity Fixed Income Commodities & Others GLOBAL ETP ASSETS BY YEAR 1 Assets ($bn) 3, 2,5 2, 1,5 1, 5 Equity Fixed Income Commodities & Others ,156 1,483 1,525 1,945 2,396 2,797 2, Jan-15 [ 4 ]

5 Year-to-date Overview GLOBAL ETP FLOWS BY EXPOSURE 1 (US$bn) January 215 January Annual Equity Developed Markets Equity (.1) Emerging Markets Equity (6.4) (8.7) (1.8) Total (6.5) (7.7) Fixed Income Government High Yield Corporate 2.3 (.3) 4. Investment Grade Corporate Others Total Commodities & others Total 5.1 (2.3) 2.6 Grand Total 11.6 (6.7) GLOBAL ETP CUMULATIVE FLOWS YTD Flows $11.6bn vs. Flows: $329.6bn J F M A M J J A S O N D CUMULATIVE EQUITY ETP FLOWS YTD Equity Flows: ($6.5bn) CUMULATIVE FIXED INCOME ETP FLOWS YTD Fixed Income Flows: $13.bn (6.5) J F M A M J J A S O N D J F M A M J J A S O N D -5 [ 5 ]

6 Flows By Listing Region Highlights (US$): 1 U.S.-listed ETPs posted outflows due to U.S. large cap equity redemptions after averaging $2bn per month in Europe-listed ETPs gathered a new monthly high of $13.7bn, already 22% of last year s record flows Canada-listed ETPs gathered $.3bn, the twelfth consecutive month of inflows Asia Pacific-listed ETP flows were flat as Japan-listed inflows were largely offset by China-listed redemptions MTD FLOWS BY LISTING REGION 1 ASSET GROWTH RATES AND # OF ETPs 1 (# ETPs) 15 Equity Fixed Income Commodities & Others Year-Over-Year Growth in # ETPs 1 5 Bubble size = Assets ($bn) Europe $468 Canada $62 Asia Pacific $21 U.S. $1,984 Latin America $8 (3%) (15%) % 15% 3% Year-Over-Year AUM Growth LISTING REGION VIEW 1 By Listing Region Net Flows ($bn) Jan 215 Annual Jan 215 Assets ($bn) % Asset Market Share Number of Products US (2.6) , ,65 Europe ,244 Canada Latin America.3 (2.) Asia Pacific (.2) Middle East and Africa Not available Not available Global ETF Total , ,42 [ 6 ]

7 Fund Inflows and Outflows 215 YTD ETPs Product_Name as of January 215 (US$bn) 1 Bloomberg BB_Ticker_S.. Ticker MTD Flows (US$bn) Inflows WisdomTree Europe Hedged Equity HEDJ US 2.9 SPDR Gold GLD US 2. Vanguard S&P 5 VOO US 1.6 Vanguard Total Stock Market VTI US 1.4 db-x MSCI EAFE Currency-Hedged Equity DBEF US 1.2 United States Oil USO US 1.2 ishares Core S&P 5 UCITS ETF CSSPX SW 1.1 Health Care Select SPDR XLV US.9 ishares iboxx $ High Yield Corporate Bond ETF HYG US.8 Market Vectors Gold Miners GDX US.8 Grand Total 13.9 Current Jan-15 AUM (US$bn) Assets YTD ETPs Product_Name as of January 215 (US$bn) 1 BB_Ticker_S.. Bloomberg Ticker MTD Flows (US$bn) Outflows SPDR S&P 5 SPY US (28.) PowerShares QQQ QQQ US (3.) Financial Select SPDR XLF US (2.1) ishares FTSE A5 China Index ETF 2823 HK (2.) ishares Russell 2 ETF IWM US (1.7) Huatai-Pinebridge CSI CH (1.4) ishares MSCI Japan ETF EWJ US (1.3) ishares MSCI ACWI ETF ACWI US (1.) ishares MSCI Emerging Markets ETF EEM US (1.) SPDR Dow Jones Industrial Average Trust DIA US (.8) Grand Total (42.3) Jan-15 Current AUM (US$bn) Assets [ 7 ]

8 Equity ETP Flows by Exposure Equity Exposure Jan 215 Flows ($bn) 215 YTD Flows ($bn) Assets ($bn) # ETPs Large cap (27.5) (27.5) Mid cap Small cap/micro cap Total market/extended Market Preferred stock US size & style total (22.) (22.) Basic Materials (.1) (.1) Consumer Cyclicals (.4) (.4) Consumer Non-cyclicals Energy US Financials (3.8) (3.8) Health Care Industrials (.9) (.9) Real Estate Technology (.) (.) Telecommunications Utilities Others US sector total US high dividend / other strategy US total (18.3) (18.3) 1, Canada (1.) (1.) North America regional equity Large Cap Mid/Small Cap Total Market Pan European size & style total Pan European sector Europe Pan European strategy Pan European total Germany U.K Other European countries Europe single country total Europe total Japan Asia-Pacific Other Asia-Pacific Asia-Pacific total Broad developed markets (including Global/Global ex-us) Developed markets total (.1) (.1) 1,97.1 2,459 Broad emerging markets (2.3) (2.3) Regional emerging markets (.1) (.1) China (5.5) (5.5) South Korea Emerging markets Mexico India Other EM Countries EM single country total (4.) (4.) Emerging markets total (6.4) (6.4) Equity total (6.5) (6.5) 2, ,317 [ 8 ]

9 Fixed Income & Other ETP Flows by Exposure Fixed Income Exposure Jan 215 Flows ($bn) 215 YTD Flows ($bn) Assets ($bn) # ETPs Investment grade Corporate High yield Corporate total US Treasury Government Sovereign Government total Broad / aggregate Govt / corporate Inflation Emerging markets Municipal Mortgage (.1) (.1) Money market Other Fixed Income Fixed income total Gold Precious Metals Silver (.1) (.1) Other (.1) (.1) Precious metals total Broad market (.3) (.3) Energy Agriculture (.2) (.2) Industrial metals (.2) (.2) Commodities total Alternatives Volatility (.2) (.2) Other (.) (.) Alternatives total (.2) (.2) Asset allocation Currency Israel ETP Global ETP total , ,42 Commodities Other [ 9 ]

10 Endnotes The ETP (or exchange traded product) category encompasses any portfolio exposure security that trades intra-day on an exchange. The data for this report are captured from a number of sources by BlackRock including provider websites, fund prospectuses, provider press releases, provider surveys, Bloomberg, the National Stock Exchange, Strategic Insight Simfund, Wind, and the Bank of Israel. All amounts are reported in US dollars. Flows are derived using daily net asset values and shares outstanding using the most recent data we can capture at month-end. For products with cross-listings, we attribute net flows and assets to the primary listings. For Middle East and Africa, net flows data is not available. Assets are derived using shares outstanding and prices at the end of each month (or the closest date available). Where price is not available, we use an approximation. For ETPs listed in Israel, product level detail is not available. Product level information is aggregated by provider, asset class, exposure, region listed and replication method to produce the various analyses in the report. 1. Data is as of January 29, 215 for Europe and January 3, 215 for the US, Canada, Latin America, Israel, and some Asia ETPs. Some Asia ETP data is as of December 3,. Global ETP flows and assets are sourced using shares outstanding and net asset values from Bloomberg for the US, Canada, Europe, Latin America and some ETPs in Asia. Middle East ETP assets are sourced from the Bank of Israel. ETP flows and assets in China are sourced from Wind. Inflows for years prior to 21 are sourced from Strategic Insights Simfund. Asset classifications are assigned by the BlackRock based on product definitions from provider websites and product prospectuses. Other static product information is obtained from provider websites, product prospectuses, provider press releases, and provider surveys. Market returns are sourced from Bloomberg. 2. Bloomberg (SPX US Index) 3. Bloomberg (EURUSD) 4. Bloomberg (DXY Currency) 5. Chicago Board Options Exchange 6. Bloomberg (SPY US Equity) 7. Bloomberg (USGG1YR) Index returns are for illustrative purposes only. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results. ABOUT BLACKROCK BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. At December 31,, BlackRock s AUM was $4.652 trillion. BlackRock helps clients meet their goals and overcome challenges with a range of products that include separate accounts, mutual funds, ishares (exchange traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions. Headquartered in New York City, as of December 31,, the firm had approximately 12,2 employees in more than 3 countries and a major presence in key global markets, including North and South America, Europe, Asia, Australia and the Middle East and Africa. For additional information, please visit the Company's website at [ 1 ]

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