The 12 ETP surprises of 2012

Global exchange-traded product (ETP) flows continued at a record-setting pace with $219 billion (€166.4 billion) through November, according to BlackRock’s latest ETP Landscape report.

The report, entitled The 12 Surprises of 2012, says total assets have increased by 23% from 2011 to $1.9 trillion, despite the impending US fiscal cliff and continued fiscal strains in the eurozone.

The 12 surprises are:

1. ETP flows remained positive every month this year, even throughout changing risk-on and risk-off conditions, for the first time since 2008.

2. Declining and persistently low interest rates have not affected the flows into fixed income ETPs, which reached an all time high of $68 billion through November. This was 13% higher than the annual record set in 2009.

3. One of the more successful strategy-based categories were minimum volatility equity funds, with investors adding $4.4 billion to volatility ETPs.

4. Active ETFs represent 1% of the industry assets and 3% of 2012 year-to-date flows, despite them being tipped as a future driver of growth.

5. Gold now accounts for 8% of the global ETP assets, 70% of commodity assets and 83% of year-to-date commodity flows. The asset class has been so successful – having grown from $20 billion in 2007 to $144 billion today, at a compound annual growth rate of 49% – it led many to argue that gold could become its own asset class.

6. Innovation continues with 570 new ETPs launched this year, even though delistings increased, and 167 closures to date.

7. Emerging markets debt assets doubled in 2012 to $20 billion.

8. Canada had the highest asset growth rate of any region, with assets increasing from $42 billion in 2011 to $55 billion in November.

9. Of the 15 new products in 2012, ten were listed in the Asia Pacific region and six provide exposure to Chinese equities.

10. Mutual funds suffered redemptions of $157 billion in the equity category, but ETPs attracted $129 billion over the 11 months to November.

11. January 2012 was the best January ever for the industry, with $33.5 billion of inflows.

12. The number of ETPs that have surpassed $500 million in assets has reached 480, up from 340 in 2009. The 480 funds with more than $500 million of assets are offered by 15 providers.

©2012 funds europe



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