The rise and rise of exchange traded funds

Published by: Datamonitor

Published: Jan. 29, 2009 - 7 Pages

Table of Contents

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

Abstract

• 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.

• 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.

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