ETF leaders see challenge to market share

Deutsche Bank, the second largest firm in the European exchange-traded products (ETP) business, has lost market share in a sign of intensified competition in the area of asset management that shoots from record to record.

Latest industry figures from BlackRock show that the bank’s ETP arm, db x-trackers, saw its market share shrink by 1.7% last year on the back of net outflows of $4 billion (€3.8 billion), despite the ETP industry – which includes ETFs – setting another record in its multi-year growth path.

The reduced market share puts Germany’s db-x trackers’ position as Europe’s second largest ETP provider under threat, primarily from France’s Lyxor – although Lyxor itself also lost market share last year.

Paris-based Lyxor managed to grow its assets in 2016 by $1.8 billion on the back of inflows, unlike the German rival which saw its assets shrink by $2.3 billion. Yet Lyxor still managed to lose 0.8% in market share.

The two firms’ European assets under management are close: $58.4 billion for db x-trackers, and $54.4 billion for Lyxor.

UBS, the fourth largest ETP provider in Europe, also lost market share, meaning three of the top five providers all lost ground. The two that didn’t were BlackRock’s iShares, and Vanguard.

The main challengers to the top ETF promoters based on BlackRock’s year-end ETP figures are State Street and ETF Securities, which both achieved a 0.7% market growth. This was the highest growth for providers last year apart from iShares, which grew in Europe by 1.1% – though even that firm saw its US market share fall by 0.6% to the benefit of Vanguard.

More industry figures show recent success for other providers. In November, BNP Paribas’s Easy ETF brand gained the most flows in Europe – $1.54 billion, according to ETFGI figures. Source ETF was third, after Vanguard.

ETFGI figures also showed that ETF Securities saw that second largest yearly inflows for the year-to-date at the end of November, with $5.22 billion. BlackRock’s figures showed ETF Securities was the third best seller for the year, behind State Street and iShares.

“It reflects how competitive the ETF market place is,” Detleff Glow, a research leader at fund data provider, Lipper, told Funds Europe. Glow said key elements to ETF sales success included high activity levels in sales and marketing.

“These products don’t just sell themselves,” he added.

BlackRock’s figures showed that the global ETF assets under management grew on the back of $379.5 billion inflows last year, bringing total assets managed to $3.51 trillion.

©2017 funds europe

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