ETFs gather record first half assets 

Shanny Basar

Exchange-traded funds and products gathered record net new assets in the first half of this year as The Boston Consulting Group said the shift from active core products will continue.

The consultancy’s thirteenth annual study of asset management, Global Asset Management 2015: Sparking Growth with Go-to-Market Excellence, said it believed the structural shift from active core products to solutions, alternatives, passive products, and specialties will not stop.

“In particular, solutions and passives are likely to get a disproportionate share of the net flows, relative to their current size,” the report said. “They therefore will remain the fastest-growing categories, squeezing the share of active core products and managers as those products suffer net outflows.”

A record level of $152bn in net new assets was gathered by ETFs and ETPs listed globally in the first half of this year, overtaking the $130bn gathered in the first six months of 2014, according to preliminary ETF and ETP global insights report from consultancy ETFGI.

Equities gathered the largest net inflows of $101.7bn, followed by fixed income with $35.4bn, and then commodities at $4.2bn.

In Paris on 30 June 2015 Euronext listed the first money market ETF denominated in renminbi on its markets. The Commerzbank CCBI RQFII Money Market UCITS ETF, managed by China’s CCB International Asset Management Limited, gives investors exposure to the interbank bond market in mainland China.

Lee Hodgkinson, head of markets and global sales and chief executive of Euronext London, said in an email to Markets Media: “The Chinese market holds enormous potential and this first ETF denominated in RMB is just a first step for many more products on Euronext, facilitating Chinese investors’ access to the European markets.  We have now signed three MOUs with leading Chinese banks and we are convinced that these will lead to deeper partnerships and the launch of a broad range of products, not only limited to ETFs.”

Euronext said it is exploring how to develop access to European capital markets for CCB, including the Chinese commercial bank becoming a trading member of Euronext markets, easing access to Euronext products within CCB and RMB payment and settlement structures.

WisdomTree Europe, the ETF issuer, said assets under management of short and leveraged ETPs reached a record $63bn at the end of June, a 2% rise on the first half of last year.

Equities had $0.8bn of net inflows as investors increased long positions in Europe and Japan while cutting long and short positions in US equities.

Viktor Nossek, director of research at WisdomTree Europe, said in a statement : “Sentiment in fixed income soured, helped not least by the uncertainty of Greece’s membership in the EMU and rising rates expectations in the US as the Fed signalled its readiness to raise the policy rate before the end of this year. Short and leveraged Investors increased their short positions in US and German government bonds as a result, helping this year’s cumulative inflows into short ETPs tracking debt globally to peak to $980m.”

Featured image via Redindie/Dollar Photo Club

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