Our monthly ‘ETF 20/20’ report briefly summarizes recent Exchange Traded Fund (ETF) trends globally. It uses data from the First Bridge ETF database that includes all global ETPs.
• Global ETP assets surged by 4.5% in July 2016 to end the month at $3.373T, with significant net inflows into equity ETFs.
• The Bank of England cut its key policy rate to 0.25% and announced plans to buy both UK government (£70B) and corporate bonds (£10B). Though a monetary stimulus is expected to lead to a weaker currency, Yen and Euro currency ETPs have strengthened in 2016 despite negative interest rates in their respective regions.
• With low yields in developed markets driven by quantitative easing, net flows into higher yield emerging market bond ETFs have increased in 2016.
• There were over 70 new ETP listings globally (including cross-listings) in July 2016. 16 were in the US including ESG, multi-factor and VIX based ETPs.
• Precious metals mining, Brazilian small cap and Peruvian stocks were among the best performing ETF categories in 2016 year to date.
• Emerging market equities were the best performing of 6 ETFs representing the major asset classes in the trailing 1 month.
First Bridge provides ETF data and analytics to reputed institutional clients. Our ETF data sets include daily ETF holdings, global ETF product & smart beta classifications, historical distributions and risk metrics. Our clients include asset managers, financial software providers and research firms that use ETF data as a critical input into their systems & workflow. We often provide ‘high touch’ services to our clients in the form of ETF data sets customized to their needs with related support. The First Bridge team combines deep expertise in the Indexing & ETF domain with skills in statistical programming and data visualization.
Global ETPs: Landscape Snapshot
Global ETP assets surged by 4.5% in July 2016 to end the month at $3.373T, with significant net inflows into equity ETFs. For more granular data & analytics on global ETFs: http://bit.ly/1pwa9FU
Key Developments Impacting ETF Investors & Providers
On Aug 4, 2016 the Bank of England cut its key policy rate to 0.25% and announced plans to buy both UK government (£70B) and corporate bonds (£10B). The stimulus package is aimed at minimizing a possible slowdown in the UK following the Brexit ‘leave’ outcome.
Though a monetary stimulus is expected to lead to a weaker currency, this has not been the case with Japan and the Eurozone in 2016. The Yen and Euro have both strengthened against the US Dollar despite negative rates and stimulus programs in their respective regions. The Pound sterling did however weaken significantly after the Brexit vote and again after the stimulus announcement. Central bank policies and the subsequent currency movements will continue to be a very significant factor in influencing returns for ETF investors this year.
With low bond yields in developed markets, investors have been rotating into higher yield bonds in emerging markets. The table below shows the net flows this year relative to last year for the 3 largest emerging market bond ETFs listed in the US.
Net Flows into 3 Largest US listed EM Bond ETFs
July 2016 ETF Launches – US
16 new ETPs were listed in the US in July 2016. The new listings encompassed multiple asset classes and included ESG, multi-factor and VIX based ETPs. A complete list of launches is available in First Bridge’s regularly updated ETF list: http://bit.ly/1W76vN5
July 2016 – Ex-US ETP Notable Launches
Below we summarize the notable new ETP listings outside the US in July 2016. The table below is summarized from First Bridge’s ETF data sets for institutional clients.
Performance of Key Asset Classes & Strategies
Precious metals mining, Brazilian small cap and Peruvian stocks were among the best performing ETF categories in 2016 year to date, although they had correspondingly high volatility (>50% in the case of SILJ). This list does not include leveraged & inverse ETFs, and includes only one ETF from each specific category (e.g. only one gold mining ETF).
Emerging market equities were the best performing of 6 ETFs representing the major asset classes in the trailing 1 month ending August 5, 2016.
More First Bridge ETF Resources
• ETF Book - ‘ETF Investment Strategies’ (McGraw-Hill): http://amzn.to/19DP5ya
• ETF Daily Holdings: http://bit.ly/2315jzP
First Bridge maintains granular data sets for all globally listed ETFs, with key metrics. For more information, email: email@example.com
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