Credit: Shutterstock photoOur 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.
• Assets for global ETPs ended the first half of June 2016 at $3.226T, up 7.4% year to date. Inflows in end June were driven by a shift into gold and treasury bond ETPs as a result of the Brexit vote.
• Over 150 new ETPs were listed globally in June 2016, including 32 in the US. Many of the US listed equity ETFs were focused on cross-sector themes, particularly ESG (environmental / social / governance) and lifestyle themes.
• In the 2 weeks after the Brexit vote, large cap UK ETFs outperformed small cap ETFs, since the former hold more companies that potentially benefit from a weaker pound. Small cap ETFs may be a better reflection of investor concerns about the potential impact of Brexit on the domestic UK market.
• US based investors are also likely to show a renewed interest in ETFs that hedge against a falling pound.
• Low volatility and dividend outperformed the other popular US equity strategies in the trailing month, as investors rotated into defensive strategies. Expectedly, Gold (GLD) was the best performing among ETFs representing 6 major asset classes, as investors looked for safety.
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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
Assets for global ETPs ended the first half of June 2016 at $3.226T, up 7.4% year to date. Inflows in end June were driven by a shift into gold and treasury bond ETPs as a result of the Brexit vote. For more granular data & analytics on global ETFs: http://bit.ly/1pwa9FU
Key ETF Developments – Brexit vote
Although the “Brexit” outcome did not trigger contagion in the form of a bank collapse or trading disruptions, the long-term implications for Pan-European trade are still uncertain. The effects that ETF investors experienced in the two weeks since the Brexit vote include:
1. Performance differential in domestic vs. export oriented UK ETFs ETFs that track the FTSE 100 and other large cap UK indices have outperformed small cap UK ETFs, since the former hold more export oriented firms that potentially benefit from the weaker pound. Small cap ETFs may be a better reflection of investor concerns about the potential impact of Brexit on the domestic UK market. US based investors are also likely to show a renewed interest in ETFs that hedge against a falling pound.
2. Gold ETP inflows
Gold (‘GLD’) was already gathering positive flows in 2016, after net outflows in 2015. Not surprisingly this trend sharply accelerated in the two weeks after the Brexit vote, as investors looked for investing safe havens.
June 2016 ETF Launches – US
32 new ETPs were launched in the US in June 2016. Many of the equity ETFs were focused on cross-sector themes, particularly ESG (environmental/social/governance) and lifestyle themes. All launches and closures are reflected in our regularly updated ETF list
June 2016 – Ex-US ETP Notable Launches
Below we summarize the notable new ETP listings outside the US in June 2016. The table below is summarized from First Bridge’s ETF data sets for institutional clients.
Performance of Key Asset Classes & Strategies
Expectedly, Gold (GLD) was the best performing among ETFs representing 6 major asset classes, as investors looked for safety after the unexpected Brexit vote outcome.
Low volatility and dividend outperformed the other popular US equity strategies as investors rotated into defensive strategies in the trailing 1 month.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
