Sustained inflows into volatility, fixed income high yield and key benchmark equity etfs. ..…
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Investors poured over US$2.6 billion of net new assets into European Exchange Traded Products (“ETPs”) in June 2012, raising the total for the six months to the end of 2Q to US$8.3 billion.
While equity and commodity products remain core investments, interest in volatility, fixed income ETPs and key benchmark ETFs have picked up. Source continued to cement its position in the European ETP industry, capturing net new assets of over US$171 million in June, bringing the YtD total to US$1.85 billion for H1. Source launched innovative products in alternative, fixed income and commodity asset classes. According to both ETF Global Insight and Deutsche Bank Research, at the end of Q2, Source was ranked 2nd in Europe for the second quarter running in terms of net new assets year to date.
Volatility ETPs continue to attract investor assets, adding over US$900 million in new assets in H1. Innovation in delivering volatility exposure now offers investors more efficient medium term investment opportunities. Source has quickly become the market leader in European volatility-linked ETFs, with three new products in Q1 and assets of over US$850 million, a market share of over 85%.
As investors start to reposition for a “risk on” environment they are adding beta to their portfolios. Source has realised large flows into broad equity indices like the S&P500, MSCI Europe, MSCI EM and MAN GLG Europe Plus Source ETF. These ETFs alone added more than US$ 717 million in net new assets in H1.
The second quarter saw increased demand for the new PIMCO Source Short-Term High Yield Corporate Bond ETF (STHY), adding a further US$ 49 million in Q2. Since its launch on 19 March, this fund has already attracted US$ 133 million in net new assets. This physically invested ETF is the first in Europe to provide access to the global short maturity high yield sector, an area which has historically provided a defensive alternative to equities while producing similar returns with reduced volatility. The ETF benefits from PIMCO’s “smart passive” approach. Its construction addresses investor concerns regarding both high index tracking error and the narrow security coverage of many existing high yield alternatives.
Finally, although the first half continued to be challenging for the performance of commodity assets, investors continued to increase their exposure to gold and broad commodity markets. The Source Physical Gold P-ETC saw US$154 million of inflows and the LGIM Commodity Composite Source ETF, which was launched in early Q1 captured in excess of US$103 million of new client money.
Although European ETP trading volumes were softer in June than May, dropping by 15% to US$2.9bn, Source’s ETF trading turnover held up well and continued to see outsized activity in its funds with in excess of US$ 52 billion gross primary turnover year to date. European ETPs continue to prove by the 4% growth of investor assets, to US$278 billion, that they are a compelling multi investor solution.
Source: ETFWorld.co.uk – Source
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