04/01/2011
Slight slowdown in ETF market
p { margin-bottom: 0.08in; } In the first 10 months of 2010, net subscriptions to ETFs in the German market declined to EUR6.8bn, compared with EUR10.4bn in the year 2009 as a whole, and EUR20.2bn in 2008 overall, the Kommalpha agency reports. Still, the number of ETFs listed in Germany has continued to increase at a constant pace of about 40% per year. In other words, ETF product offerings are increasing faster than the proportion of assets in open-ended funds these products represent (which currently comes to about 8.6%, with assets of EUR59.7bn).The Hanover-based specialists also observe that actively-managed funds in January-October of last year saw net subscriptions of EUR14.8bn, twice the volume of ETF subscriptions. In plain words, if their net inflows continue to decline, ETF promoters will have to compete doggedly with active management firms.However, the trend for passively-managed products has not yet reached all asset classes, which offers good potential for ETF managers. Among the specialists who are not yet fully covered by ETFs are eastern European equities, global equities, and east Asian equities, including Japan, as well as corporate bonds, global mid-range maturity bond funds, and emerging market bond funds. In these categories, the proportion of ETFs as a part of total assets is below 5%, except for eastern European equities (8.8%) and corporate bonds (5.1%).In contrast, penetration is very high for emerging market equities funds (41.4%), North American equities funds (35.8%), and German equities funds (24.7%), and also for Euro-denominated long-term bond funds (20.1%).
