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The rise and rise of exchange traded funds

Datamonitor
January 29, 2009
7 Pages - SKU: DFMN2104415

Abstract Table of Contents Search inside this report Related Reports

Introduction

Turmoil in global markets is shifting European investors' portfolio holdings, with increased take up of ETFs, providing innovative opportunities for asset managers.

Scope

Sizes and forecasts the global ETF market through until 2012.
Discusses the key characteristics of ETFs that are appealing to investors given the current economic turmoil.
Identifies the key types of ETF products and messages which asset managers need to communicate to investors.

Highlights

This brief analyses the rapid growth of ETFs, focusing particularly on their rise in a period where the industry has seen substantial mutual fund outflows. It considers the features of ETFs that have contributed to their rising popularity and suggests that asset managers draw on these features when creating and marketing ETFs.

As well as charting the phenomenal rise of ETFs, Datamonitor sizes the global market and forecasts the future growth of ETFs through to 2012.Reasons to Purchase

Key insight into the size and future of the ETF market globally.
Learn what key product features are being demanded by investors in today's market and how asset managers should orient their marketing effort.
Identifies key reasons for the continued rise of ETFs in the global funds market.

DATAMONITOR VIEW
CATALYST
SUMMARY
EXCHANGE TRADED FUNDS: OFFERING INVESTORS SUNSHINE ON A CLOUDY DAY?: Five key characteristics of ETFs appeal to investors; The broadness of exposure is an issue in the ETF market,with distinctions in investor preferences; The US is the world's largest market for ETFs; ETFs are gaining in popularity in Europe; Germany's Xetra is Europe's largest ETF exchange; France is Europe's second largest ETF market; The UK remained behind Germany and France in part because of the imposition of stamp duty; ETF growth across Europe will be slow but positive,except in the UK where ETFs will see a slight decline in 2009; Hong Kong's ETF market is growing rapidly; The range of ETFs is diverse but asset managers should promote appropriate funds; The recent proliferation in ETFs has been in the more narrow funds and broadness of exposure is an issue; Some wealth managers are not keen to promote ETFs but they will still forge ahead; 'Accentuate the positive,eliminate the negative': wealth managers should assist clients to prepare for the eventual recovery; THE LARGEST GLOBAL PROVIDERS ARE EXPANDING THEIR RANGE OF ETFS AND ACTIVELY SEEKING INVESTORS; iShares was the first provider to launch ETFs and now has over $300 billion in AUM; iShares has reported investors seeking refuge in ETFs; ETFs are well explained on Barclay's Global Investors' website; State Street Global Advisors is the second largest ETF provider with $130 billion in AUM; Vanguard is ranked third by AUM,but is far smaller than the two largest players; Lyxor Asset Management,owned by Société Générale,is the fourth largest ETF company; Lyxor has launched the first ever ETF focusing on the Gulf region; Lyxor also launched commodity ETFs in 2008; PowerShares is owned by Invesco and is the fifth largest provider of ETFs globally; ProShares has a range of 76 ETFs,offering investors 'short' and 'ultra' Proshares; db x-trackers; Nomura Asset Management; Bank of New York; Nikko Asset Management; Daiwa Asset Management; Daiwa has launched a Shariah compliant Japanese ETF listed in Singapore; Credit Suisse Asset Management; BNP Paribas managed both ETF products and marketing innovations simultaneously; NYSE Euronext and EasyETF launch European low-carbon index and ETF managed by BNP Paribas
APPENDIX: Bibliography; Methodology; Further reading; Ask the analyst; Datamonitor consulting; Disclaimer
List of Tables: Table 1: iShares offers equity,fixed income and commodity ETFs; Table 2: State Street Global Advisors's ETFs focus on US and international sectors/industries; Table 3: Vanguard has a range of 38 ETFs on offer,representing $40.23 billion in AUM; Table 4: Lyxor manages a broad range of ETFs,with many distinguished geographically; Table 5: PowerShares offers a very comprehensive sectoral range of ETFs; Table 6: ProShares offers its own 'short' and 'ultra' ETFs designed to meet the needs of different markets
List of Figures: Figure 1: ETF growth in the US will reach close to 25% by 2012 when the stock market has recovered; Figure 2: Germany's ETF market has exploded in the last five years; Figure 3: Euronext's NextTrack ETFs have grown strongly in the past few years; Figure 4: ETF trading on the London exchange has grown strongly,particularly in 2008; Figure 5: After lackluster growth in 2009,Europe's ETF market will grow strongly again; Figure 6: Hong Kong's ETF market boomed in 2007; Figure 7: Hong Kong's ETF market will grow by nearly 35% year-on-year by 2012; Figure 8: Spelling out ETF basics for investors; Figure 9: iShares stresses that its ETF are different; Figure 10: SPDR is the propriety name for SSgA's ETFs and the website is full of information about product range and performance; Figure 11: Vanguard has an attractive website offering ease of accessibility to its range of ETFs; Figure 12: Lyxor provides a list of key benefits of Lyxor ETFs; Figure 13: Invesco PowerShares offers 'active' ETFs

The rise and rise of exchange traded funds

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