Asia Synthetic Equity & Index Strategy Asia-Pac Monthly ETF Insights Date 10 May 2017 Deutsche Bank Markets Research China Money Market Inflows offset Equity Outflows Data in this report is as of 28 th April 2017 Asia-Pac listed ETP Flows: Strong inflows into China money market ETFs, outflows from equities Asia-Pac listed ETPs registered inflows of +$1.6bn in April taking YTD inflows total to +$22.7bn. Equity ETFs flows turned negative and recorded outflows of -$736mn while fixed income ETFs registered inflows of +$2.6bn). Equity ETF outflows in Asia-Pac region have been primarily driven by leveraged/inverse and Korea focused ETFs recording -$809mn and -$414mn worth of redemptions. Till March, Equity ETFs have been receiving strong inflows which were primarily contributed by huge inflows into Japan-focused ETFs driven by Bank of Japan purchases. But in April, Japan focused ETFs received only mild inflows (+ $217mn). Fixed income ETF inflows were primarily driven by China money market ETFs bringing in +$2.6bn in new money over the last month. New launches: 14 new ETFs launched primarily around US treasuries and leveraged/inverse exposure During April 2017, Asia-Pac ETP market recorded 14 new launches including 7 fixed income, 6 equity and 1 commodity ETFs. New launches were around long term US treasuries with long only, leveraged long and inverse exposures, Korea, dividend, low vol, Japan and global technology sector exposures. Releated recent research ETF Annual Review & Outlook - $4 trillion Global ETF market in sight for 2017 31-Jan-17 Global ETP assets set to surpass $4 trillion mark Global ETP AUM have grown rapidly this year and moved to its new peak by the end of April. Total ETP AUM closed the month at $3.96 trillion with 2% month-on-month and 12.7% year-on-year rise, supported by strong inflows and bullish markets. Asia-Pac listed ETP assets closed the month at $355.9bn. Inflows for ETPs listed globally (ex-RoW) slowed down in April in comparison to Q1 but still stood healthy. ETPs listed globally received inflows of about +$33bn in April taking YTD total to +220.6bn. Similar to previous months, inflows were dominated by US ETPs bringing in +$26.4bn in new money, followed by Europe and Asia-Pac ETPs attracting +$4.9bn and +$1.6bn worth of inflows respectively. Global investor positioning: Broad DM, Europe and EM preferred, Inflow to India, outflow from Korea Based on March flows to ETFs listed globally with regional focus, Broad (global) DM have been most favored receiving major inflows, followed by DM Europe and Ari Rajendra Strategist +44-20-754-52282 Sebastian Mercado, CFA Strategist +1-212-250-8690 Deutsche Bank AG/London Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1.MCI (P) 083/04/2017. Distributed on: 10/05/2017 16:15:10 GMT 0bed7b6cf11c
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10 May 2017
Asia-Pac Monthly ETF Insights
Asia Synthetic Equity & Index Strategy
Asia-Pac MonthlyETF Insights
Date10 May 2017
Deutsche BankMarkets Research
China Money Market Inflows offsetEquity OutflowsData in this report is as of 28th April 2017
Asia-Pac listed ETP Flows: Strong inflows into China money market ETFs,outflows from equitiesAsia-Pac listed ETPs registered inflows of +$1.6bn in April taking YTD inflowstotal to +$22.7bn. Equity ETFs flows turned negative and recorded outflows of-$736mn while fixed income ETFs registered inflows of +$2.6bn). Equity ETFoutflows in Asia-Pac region have been primarily driven by leveraged/inverse andKorea focused ETFs recording -$809mn and -$414mn worth of redemptions. TillMarch, Equity ETFs have been receiving strong inflows which were primarilycontributed by huge inflows into Japan-focused ETFs driven by Bank of Japanpurchases. But in April, Japan focused ETFs received only mild inflows (+$217mn). Fixed income ETF inflows were primarily driven by China money marketETFs bringing in +$2.6bn in new money over the last month.
New launches: 14 new ETFs launched primarily around US treasuries andleveraged/inverse exposureDuring April 2017, Asia-Pac ETP market recorded 14 new launches including 7fixed income, 6 equity and 1 commodity ETFs. New launches were around longterm US treasuries with long only, leveraged long and inverse exposures, Korea,dividend, low vol, Japan and global technology sector exposures.
Releated recent research
ETF Annual Review & Outlook -
$4 trillion Global ETF market in
sight for 2017
31-Jan-17Global ETP assets set to surpass $4 trillion markGlobal ETP AUM have grown rapidly this year and moved to its new peak bythe end of April. Total ETP AUM closed the month at $3.96 trillion with 2%month-on-month and 12.7% year-on-year rise, supported by strong inflows andbullish markets. Asia-Pac listed ETP assets closed the month at $355.9bn. Inflowsfor ETPs listed globally (ex-RoW) slowed down in April in comparison to Q1but still stood healthy. ETPs listed globally received inflows of about +$33bn inApril taking YTD total to +220.6bn. Similar to previous months, inflows weredominated by US ETPs bringing in +$26.4bn in new money, followed by Europeand Asia-Pac ETPs attracting +$4.9bn and +$1.6bn worth of inflows respectively.
Global investor positioning: Broad DM, Europe and EM preferred, Inflow toIndia, outflow from KoreaBased on March flows to ETFs listed globally with regional focus, Broad (global)DM have been most favored receiving major inflows, followed by DM Europe and
Ari Rajendra
Strategist
+44-20-754-52282
Sebastian Mercado, CFA
Strategist
+1-212-250-8690
Deutsche Bank AG/London
Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should beaware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should considerthis report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONSARE LOCATED IN APPENDIX 1.MCI (P) 083/04/2017.
Broad (global) EM. After experiencing outflows for almost entire year in 2016, DMEurope received its fifth consecutive monthly inflows in April this year.
Equity ETFs listed globally (offshore only) with investment focus in the Asia-Pacific region closed the month at $129.4bn. These ETFs recorded inflows in Apriltotaling +$768mn on net basis. India and DM (broad) Asia focused ETFs receivedmajor inflows recording +$263mn and +$248mn in new money respectively. Onthe contrary, Korea focused ETFs shed -$208mn as outflows. India focused ETFshave been attracting steady inflows for last three months bringing in +$753mnworth of inflows on YTD basis.
Page 2 Deutsche Bank AG/London
10 May 2017
Asia-Pac Monthly ETF Insights
Table Of Contents
1. Market Overview .......................................................... 4Market review: Positivity continues for most markets .................................... 4
2. Asia-Pac Listed ETF Activity Summary ........................ 5Strong inflow into China money market ETFs, outflows from equitie ............. 5
3. Product Insights ........................................................... 7New launches – 14 new ETFs launched primarily around US treasurie .......... 7
4. Global ETP Industry Overview and Investment Tre........................................................................................... 8Global ETP assets set to surpass $4 trillion mark .......................................... 8Regional positioning: Broad DM, Europe and EM preferred ........................... 9Global Investor positioning in Asia: Inflow to India, outflow fro ..................... 9ETFs vs. Mutual Funds in Asia Pac .............................................................. 11
5. Performance and Growth ........................................... 13Performance and growth for Asia-Pac focused ETFs listed globally ............. 13Top ETPs – Asia-Pac listed ........................................................................... 15Top ETPs – Other regions with Asia-Pac focus ............................................. 18
Appendix B: How we define ETPs ................................. 60
Deutsche Bank AG/London Page 3
10 May 2017
Asia-Pac Monthly ETF Insights
1. Market OverviewMarket review: Positivity continues for most markets
Major equity markets globally continue to return positive on a month-over-monthbasis for most of the markets. During April, within Asia-Pac region, South Koreaand Hong Kong were the best performers with over 2% MoM return. Broad globalemerging markets return was also positive at about 2% over the last month.Outside Asia-Pac region, European and US markets witnessed healthy positivereturns of about 1.5% and 1% respectively.
On a YTD basis, all the major markets ended in positive territory at the end ofApril. Within Asia-Pac, India and Hong Kong recorded highest returns of about12% while broad global emerging markets were up by 13.4%. US and Europeanmarkets returned about 6.5% and 7% respectively.
Following is the snapshot of major benchmarks’ recent performance:
Figure 1: Major Benchmark Performance
Japan (Nikkei 225) 1.52% -1.10% 0.43% 15.18%
South Korea (KOSPI2) 2.34% 3.92% 10.46% 17.13%
China (CSI 300) -0.47% 0.09% 3.92% 8.97%
Taiwan (TWSE) 0.62% 0.63% 6.68% 17.83%
Hong Kong (HSI) 2.09% 1.56% 11.88% 16.84%
India (Sensex) 1.01% 3.05% 12.36% 16.84%
Singapore (FSSTI) 0.01% 2.54% 10.23% 11.87%
Australia (S&P/ASX 200) 1.01% 2.67% 4.56% 12.79%
US (S&P 500) 0.91% -0.04% 6.49% 15.44%
Europe (STOXX Europe 600) 1.56% 2.94% 7.10% 13.36%
Asia-Pac (MSCI AC Asia Pacific - MXAP) 1.33% 1.27% 10.24% 15.47%
EM (MSCI Emerging Markets - MXEF) 2.04% 2.35% 13.42% 16.87%
BenchmarksApr - 17
(MoM)
Mar - 17
(MoM)YTD TTM
Source: Deutsche Bank, Bloomberg Finance LP
Figure 2: Apr-17 (MoM) benchmark performance
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KOSPI2
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600
Nikkei 225
S&P/ASX 200
Sensex
S&P 500
TWSE
FSSTI
CSI 300
KOSPI2
CSI 300
Source: Deutsche Bank, Bloomberg Finance LP
Figure 3: YTD benchmark performance
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S&P/ASX 200
CSI 300
Nikkei 225
Sensex
Nikkei 225
Source: Deutsche Bank, Bloomberg Finance LP
Page 4 Deutsche Bank AG/London
10 May 2017
Asia-Pac Monthly ETF Insights
2. Asia-Pac Listed ETFActivity SummaryStrong inflow into China money market ETFs, outflowsfrom equities
Asia-Pac listed ETPs registered inflows of +$1.6bn in April taking YTD inflowstotal to +$22.7bn. Equity ETFs flows turned negative and recorded outflows of -$736mn while fixed income ETFs registered inflows of +$2.6bn.
Equity ETF outflows in Asia-Pac region have been primarily driven by leveraged/inverse and Korea focused ETFs recording -$809mn and -$414mn worth ofredemptions. Till March, Equity ETFs have been receiving strong inflows whichwere primarily contributed by huge inflows into Japan-focused ETFs driven byBank of Japan purchases. But in April, Japan focused ETFs received only mildinflows (+$217mn). Fixed income ETF inflows were primarily driven by Chinamoney market ETFs bringing in +$2.6bn in new money over the last month.
Figure 4: Major flow activity by country – Apr 2017
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Japan South Korea China Taiwan
India Hong Kong Australia
*Includes Asia listed equity and fixed income ETFs by investment focus country
Source: Deutsche Bank, Bloomberg Finance LP, Reuters
Figure 5: Major flow activity by country – YTD
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Japan China Hong Kong Taiwan
South Korea Australia India
*Includes Asia listed equity and fixed income ETFs by investment focus countrySource: Deutsche Bank, Bloomberg Finance LP, Reuters
Wins and losses: At ETP level, largest inflows were received by Yinhua TradedMoney Market Fund (511880 CH), Fortune SGAM Xianjin Tianyi Money Market(511990 CH) and Nomura Nikkei 225 ETF (1321 JP) collecting +$1.3bn, +$1.1bnand +$568mn respectively. Largest redemptions were experienced by Next FundsNikkei 225 Inverse Index ETF (1571 JP), Daiwa ETF - Nikkei 225 (1320 JP) andNikko Exchange Traded Index 225 (1330 JP) with outflows of -$990mn, -$548mnand -$319mn respectively.
Turnover: Floor activity down by 20% in AprilAsia-Pac-listed ETP turnover was down by 20% and totaled $157bn for the monthof April. On a country level, stock exchanges in China topped the turnover rankingwith aggregate turnover of $97.5bn, followed by Japan ($28.3bn), Korea ($14.5bn)and Hong Kong ($12.8bn).
At ETP level, Fortune SGAM Xianjin Tianyi Money Market (511990 CH), YinhuaTraded Money Market Fund (511880 CH) and Next Funds Nikkei 225 Leveraged
Deutsche Bank AG/London Page 5
10 May 2017
Asia-Pac Monthly ETF Insights
Index ETF (1570 JP) were the most traded products of the month recording totalturnovers of $36.6bn, $23.2bn and $17.6bn respectively.
AUM: Assets at $356bnAsia-Pac-listed ETPs closed the month at $355.9bn with 1.1% or $3.9bn increaseon MoM basis. On a year-to-date basis assets are about 13% or $41.5bn abovelast year levels.
Page 6 Deutsche Bank AG/London
10 May 2017
Asia-Pac Monthly ETF Insights
3. Product InsightsNew launches – 14 new ETFs launched primarily aroundUS treasuries and leveraged/inverse exposure
During April 2017, Asia-Pac ETP market recorded 14 new launches including 7fixed income, 6 equity and 1 commodity ETFs.
Among fixed income ETFs, new launches were around long term US treasurieswith long only, leveraged long and inverse exposures. These ETFs were listedby KB Asset Management on Korea Stock Exchange and Cathay SecuritiesInvestment Trust on Taiwan Stock Exchange. These 7 new launches haveexpanded the product range in the Asia-Pac region tracking long term UStreasuries and providing leveraged/inverse exposure.
Among equity ETFs, new launches were around Korea, dividend, low vol,leveraged, Japan and global technology sector exposures.These ETFs were listedby various issuers on Korea Stock Exchange, Singapore Exchange, Tokyo StockExchange and Australian Securities Exchange.
In addition, Paradigm Asset Management made its debut with the launch of onecommodity ETF on Taiwan Stock Exchange tracking the performance of S&P GSCISoybeans ER Index.
Figure 6: New launches in April
Source: Deutsche Bank, Bloomberg Finance LP, Reuters
Deutsche Bank AG/London Page 7
10 May 2017
Asia-Pac Monthly ETF Insights
4. Global ETP IndustryOverview and InvestmentTrendsGlobal ETP assets set to surpass $4 trillion mark
Global ETP AUM have grown rapidly this year and moved to its new peak by theend of April. Total ETP AUM closed the month at $3.96 trillion with 2% month-on-month and 12.7% year-on-year rise, supported by strong inflows and bullishmarkets. Asia-Pac listed ETP assets closed the month at $355.9bn.
Inflows for ETPs listed globally (ex-RoW) slowed down in April in comparison toQ1 but still stood healthy. ETPs listed globally received inflows of about +$33bnin April taking YTD total to +220.6bn. Similar to previous months, inflows weredominated by US ETPs bringing in +$26.4bn in new money, followed by Europeand Asia-Pac ETPs attracting +$4.9bn and +$1.6bn worth of inflows respectively.On asset class level, equity and fixed income drove the inflows contributing +$16.8bn and +$15bn inflows respectively over the last month.
Figure 7: Global ETP regional asset growth historically
*As of last month except for RoW which is as of 8 May 2017
Source: Deutsche Bank, Bloomberg Finance LP, Reuters
Page 8 Deutsche Bank AG/London
10 May 2017
Asia-Pac Monthly ETF Insights
Figure 8: Global flows summary by region
Apr-17 Mar-17 YTD
Asia-Pac 1,635 6,049 22,677
Europe 4,910 11,686 39,684
US 26,366 45,415 158,211
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Source: Deutsche Bank, Bloomberg Finance LP, Reuters
Figure 9: Regional flows as a % of AUM
Apr-17 Mar-17 YTD
Asia-Pac 0.5% 1.8% 86.5%
Europe 0.8% 1.9% 83.5%
US 0.9% 1.7% 75.0%
0.0%
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30.0%
40.0%
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60.0%
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80.0%
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Net
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ws a
s a
% o
f A
UM
Source: Deutsche Bank, Bloomberg Finance LP, Reuters
Regional positioning: Broad DM, Europe and EM preferred
Based on March flows to ETFs listed globally with regional focus, Broad (global)DM have been most favored receiving major inflows, followed by DM Europe andBroad (global) EM. After experiencing outflows for almost entire year in 2016, DMEurope received its fifth consecutive monthly inflows in April this year.
Figure 10: Broad market flows movement – Apr 2017*
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DM - Europe DM - Broad DM - Asia Pac EM - Asia Pac Broad - Asia Pac EM - Broad EM - EMEA EM - LATAM
*These figures includes globally listed broad market focused ETFs from all the segments within equityasset class (i.e. country, regional, sector, size, strategy, style and thematic).
Source: Deutsche Bank, Bloomberg Finance LP, Reuters
Figure 11: Broad market flows movement – YTD*
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DM - Europe DM - Broad DM - Asia Pac EM - Asia Pac Broad - Asia Pac EM - Broad EM - EMEA EM - LATAM
*These figures includes globally listed broad market focused ETFs from all the segments within equityasset class (i.e. country, regional, sector, size, strategy, style and thematic).Source: Deutsche Bank, Bloomberg Finance LP, Reuters
Global Investor positioning in Asia: Inflow to India, outflowfrom Korea
Total assets of equity ETFs listed globally (offshore only) with investment focusin the Asia-Pacific region closed the month at $129.4bn, 1.6% above previousmonth's level.
These ETFs recorded inflows in April totaling +$768mn on net basis. India andDM (broad) Asia focused ETFs received major inflows recording +$263mn and +$248mn in new money respectively. On the contrary, Korea focused ETFs shed -$208mn as outflows. India focused ETFs have been attracting steady inflows forthe last three months bringing in +$753mn worth of inflows on YTD basis. Thismay be primarily due to state elections results and anticipated economic reforms.
Deutsche Bank AG/London Page 9
10 May 2017
Asia-Pac Monthly ETF Insights
Figure 12: Offshore equity ETFs listed globally with investment focus in Asia*
Investment Focus Apr-17% of
AUMMar-17 Feb-17 YTD
% of
AUMApr-17 Mar-17 Dec-16
Emerging Markets
Bangladesh 0 0.0% 0 0 0 0.0% 26 28 25
China 34 0.1% -302 -292 -1,230 -4.3% 29,408 29,400 28,477
India 263 2.5% 390 111 753 8.7% 11,225 10,716 8,667
Indonesia 50 6.5% 11 -13 36 4.9% 841 768 739
Malaysia 27 6.7% 75 1 106 35.7% 445 402 297
Pakistan 3 3.9% -3 9 25 51.5% 73 69 48
Philippines 20 8.8% -3 -2 32 15.8% 259 227 203
South Korea -208 -4.7% -59 2 -289 -7.4% 4,211 4,411 3,897
Taiwan 50 1.3% 184 -23 212 6.5% 3,903 3,784 3,243
Thailand -4 -0.8% 19 13 29 6.9% 488 493 427
Vietnam -6 -1.0% -15 4 -16 -3.1% 542 552 518
EM Asia Broad 90 3.3% 110 119 354 16.3% 2,882 2,732 2,170
Total 320 0.6% 407 -73 12 0.0% 54,302 53,581 48,711
Developed Markets
Australia -59 -1.8% -629 15 -605 -17.9% 3,094 3,183 3,379
Hong Kong 10 0.4% 10 77 -137 -5.7% 2,616 2,541 2,410
Japan -83 -0.2% -1,128 787 675 1.5% 49,080 48,529 46,353
Total 109 0.2% -1,274 1,182 1,137 1.8% 67,526 66,645 62,531
Asia Broad Indices 340 4.8% 314 -19 527 8.6% 7,619 7,131 6,160
Grand Total 768 0.6% -553 1,090 1,676 1.4% 129,446 127,357 117,402
Net Flows ($ million) AUM ($ million)
*This figure includes ETFs (offshore only) from all the segments within equity asset class (i.e. country, regional, sector, size, strategy, style andthematic).
Source: Deutsche Bank, Bloomberg Finance LP, Reuters
Figure 13: Flows by DM country – Apr 2017*
-100 -80 -60 -40 -20 0 20
Hong Kong
New Zealand
Singapore
Australia
Japan
Apr. Flows ($mn)
*This figure includes ETFs (offshore only) from all the segments within equity asset class (i.e. country,regional, sector, size, strategy, style and thematic).
Source: Deutsche Bank, Bloomberg Finance LP, Reuters
Figure 14: Flows by DM country – YTD*
-1,000 -500 0 500 1,000
Australia
Hong Kong
Singapore
New Zealand
Japan
YTD Flows ($mn)
*This figure includes ETFs (offshore only) from all the segments within equity asset class (i.e. country,regional, sector, size, strategy, style and thematic).Source: Deutsche Bank, Bloomberg Finance LP, Reuters
Page 10 Deutsche Bank AG/London
10 May 2017
Asia-Pac Monthly ETF Insights
Figure 15: Flows by EM country – Apr 2017*
-300 -200 -100 0 100 200 300
India
Taiwan
Indonesia
China
Malaysia
Philippines
Thailand
Vietnam
South Korea
Apr. Flows ($mn)
*This figure includes ETFs (offshore only) from all the segments within equity asset class (i.e. country,regional, sector, size, strategy, style and thematic).
Source: Deutsche Bank, Bloomberg Finance LP, Reuters
Figure 16: Flows by EM country – YTD
-1,500 -1,000 -500 0 500 1,000
China
South Korea
Vietnam
Thailand
Philippines
Indonesia
Malaysia
Taiwan
India
YTD Flows ($mn)
*This figure includes ETFs (offshore only) from all the segments within equity asset class (i.e. country,regional, sector, size, strategy, style and thematic).Source: Deutsche Bank, Bloomberg Finance LP, Reuters
ETFs vs. Mutual Funds in Asia Pac
Asia-Pac ETPs comprised 7.6% of the continent’s mutual fund industry as ofQ4 2016 according to mutual fund industry data published by the InvestmentCompany Institute (ICI). This has steadily grown from 4.6% at the end of Q12014. US ETPs comprised 18.6% while Europe ETPs comprised 3.8% of respectiveregion’s mutual fund industry as of Q4 2016. Within Asia-Pac, Taiwan is on the topwith ETP assets accounting for 18.9% of mutual fund assets, followed by JapanETP assets accounting for 16.8% of mutual fund assets.
Source: Deutsche Bank, Bloomberg Finance LP, Reuters, ICI
Page 12 Deutsche Bank AG/London
10 May 2017
Asia-Pac Monthly ETF Insights
5. Performance andGrowthPerformance and growth for Asia-Pac focused ETFs listedglobally
ETF Performance - Outperformers and underperformersTop performing ETFs of the month were dominated by India-focused ETFs whilean ETF tracking S&P/ASX 200 Index was least performer of the month.
Figure 19: Top 10 best performance
ETF Name Bloomberg Underlying Index 28-Apr-17 31-Mar-17 28-Feb-17 YTD
VanEck Vectors India Small-Cap Index ETF SCIF US Market Vectors India Small-Cap 8.6% 9.0% 7.4% 41.1%
R*Shares CPSE BeES CPSEBE IN CPSE Index 6.7% 0.3% 4.4% 19.2%
iShares MSCI India Small-Cap ETF SMIN US MSCI India Small Cap 6.5% 8.2% 9.1% 36.9%
Smartshares - Europe Trust EUF NZ FTSE Developed Europe Index 6.4% 6.7% 0.5% 14.2%
KraneShares CSI China Internet ETF KWEB US CSI Overseas China Internet 6.0% 5.7% 5.0% 29.2%
iShares Asia Pacific Dividend UCITS ETF IAPD LN DJ Asia Pacific Select Dividend -4.2% 0.2% 4.4% 2.3%
iShares MSCI Australia UCITS ETF SAUS LN MSCI Australia -4.1% 2.1% 5.1% 5.0%
db x-trackers FTSE Vietnam UCITS ETF XFVT GR FTSE Vietnam -3.6% 3.5% 3.9% 5.3%
Kokusai S&P500 VIX Short Term Futures Index ETF 1552 JP S&P 500 VIX Short-Term Futures Index -3.6% -14.0% -9.2% -41.2%
iShares China Large Cap UCITS ETF FXC LN FTSE China 50 -3.3% 0.1% 5.4% 4.5%
Lyxor UCITS ETF China Enterprise (HSCEI) ASI FP Hang Seng China Enterprise Index -3.0% -1.2% 7.4% 5.6%
Universe: All Asia-Pac listed ETPs + US & Europe listed ETPs with investment focus in Asia-Pacific, Long only, AUM >$100mn as of previous month
Source: Deutsche Bank, Bloomberg Finance LP, Reuters
Figure 22: Bottom 3 ETFs by performance in April - Daily performance YTD
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Universe: All Asia-Pac listed ETPs + US & Europe listed ETPs with investment focus in Asia-Pacific, Long only, AUM >$100mn as of previousmonth
Source: Deutsche Bank, Bloomberg Finance LP, Reuters
ETP flow growth - Winners and losersAn ETF tracking Indian small caps led the table as largest fund flow receiveras a percentage of AUM during last month, whereas an ETF providing inverseexposure to Japanese equities saw the largest outflows as a percentage of AUMover the same period.
Page 14 Deutsche Bank AG/London
10 May 2017
Asia-Pac Monthly ETF Insights
Figure 23: Top 10 Inflows as a % of AUM
ETF Name Bloomberg Underlying Index % of AUMCashflows
($mn)
AUM
($mn)
% of
AUM
Cashflows
($mn)
% of
AUM
Cashflow
s ($mn)
% of
AUM
Cashflow
s ($mn)
iShares MSCI India Small-Cap ETF SMIN US MSCI India Small Cap 48.9% 52.0 166.5 11.3% 10.0 2.4% 1.9 86.3% 63.9
Huatai-PB Traded Money Market Fund 511830 CH Other 47.4% 130.8 406.0 45.8% 86.7 -27.8% -72.8 -41.7% (288.2)
Yinhua Traded Money Market Fund 511880 CH Other 35.6% 1,319.0 5,029.1 -11.9% -499.1 0.0% -0.7 46.4% 1,570.5
Rongtong Easy Payment Money Market Fund 511910 CH Other -45.4% (72.5) 87.0 265.8% 116.1 -50.1% (43.7) -67.0% (173.6)
Daiwa ETF Japan Nikkei 225 Inverse Index 1456 JP Nikkei 225 Inverse Index -44.0% (63.4) 81.5 -14.7% (24.7) 0.0% - -56.0% (94.2)
Ping An-Uob Traded Money Market Fund 511700 CH Other -40.0% (58.0) 87.0 -16.5% (28.9) -20.0% (43.7) -68.9% (188.3)
Huaan Ririxin Monetary Market Fund ETF 511600 CH Other -36.3% (58.0) 101.5 -8.3% (14.5) 9.1% 14.6 -84.6% (535.4)
Essence Margin Traded Money Market Fund 511680 CH Other -28.5% (29.0) 72.5 -41.5% (72.4) -14.3% (29.1) -67.3% (145.2)
China Southern CSI All Share Securities Companies ETF Index Fund 512900 CH SSE All Securities Company Index -27.6% (42.8) 110.1 0.0% 157.7 0.0% - 0.0% 115.0
Yuanta S&P GSCI Crude Oil 2X Leveraged ER Futures ETF 00672L TT S&P GSCI Crude Oil 2X Leveraged Index E -27.0% (46.4) 123.8 99.9% 87.5 -14.2% (14.1) 23.9% 25.3
Total ( All Local Issuers) 311,892 38,132 4,880 995 355,898 100%
Current Month AUM (US$ Million)
Source: Deutsche Bank, Bloomberg Finance LP.
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The Foreign Issuer AUM ranking includesthe AUM of all products cross listed in theAsia-Pacific Region, with a domicile regionoutside Asia-Pacific (e.g. the US or Europe).
Figure 53: ETP AUM (US$ Million) ranking by Foreign Issuer
Issuer EquityFixed
IncomeCommodity Total
Mkt
Share %
BlackRock 301,971 7,700 - - 309,671 40.3%
State Street 268,569 3,913 34,736 - 307,219 40.0%
Vanguard 98,510 695 - - 99,205 12.9%
Deutsche AM 25,502 2,514 - - 28,016 3.6%
ETF Securities - - 10,335 - 10,335 1.3%
Lyxor 5,908 - 1,017 - 6,924 0.9%
UBS 6,798 - - - 6,798 0.9%
BNP Paribas 15 - 95 - 110 0.0%
ComStage 97 - - - 97 0.0%
Total ( All Foreign Issuers) 707,370 14,822 46,183 - 768,375 100%
Current Month AUM (US$ Million)
Source: Deutsche Bank, Bloomberg Finance LP.
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7. ETP - Net FlowsInvestment Focus
Figure 54: ETP Net Flows (US$ Million) by Investment Focus – Equity
Investment Focus - EquityNet
Cashflow
% of
AUM
Net
Cashflow
% of
AUM
Net
Cashflow
% of
AUM
Developed Markets 174 0.1% 10,444 5.1% 25,146 13.8%
The authors of this report wish to acknowledge the contribution made byVibhor Mahalwala and Varun Sachdeva, employees of Evalueserve, a third partyprovider to Deutsche Bank of offshore research support services.
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Appendix A: Glossary
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Appendix B: How wedefine ETPs
Exchange-Traded Products (ETPs)We define an exchange-traded product (ETP) as a secure (funded or collateralized)open-ended delta-one exchange-traded equity or debt instrument with noembedded optionality and market-wide appeal to investors. This includesexchange traded funds, exchange-traded commodities (Europe) and exchange-traded vehicles (US).
The figure below provides a summary of our current coverage universe by regionand structure type as on 30 December 2016.
The vast majority of instruments are ETFs (97.4%, 4,779 products, $3,422bn) withthe remainder being ETCs (0.8%, 474 products, $26.5bn) in Europe and ETVs(1.8%, 64 products, $61.7bn) in the US.
Figure 97: ETP Coverage Universe Summary
Source: Deutsche Bank, Bloomberg Finance LP, Reuters
Exchange-Traded Funds (ETFs, 97.4%)US (70.4%): Fund structures that issue shares that are traded on an exchangemuch the same way as equities. ETFs indexed to equity and fixed incomebenchmarks are registered under the investment company act of 1940. Onlyphysical index replication techniques are permissible by this legislation whilesynthetic replication is not allowed.
Europe (15.5%): Fund structures that issue units or shares that are traded on anexchange much the same way as equities. The vast majorities of European ETFsare UCITS III compliant and are primarily domiciled in Dublin and Luxemburg. TheUndertakings for Collective Investment in Transferable Securities (UCITS) are aset of European Union directives that aim to allow collective investment schemesto operate freely throughout the EU on the basis of a single authorization fromone member state. Both physical and synthetic index replication is permissible byUCITS and funds are allowed to track equity, fixed income as well as diversifiedcommodity indices.
Asia (8.9%): Both European and US ETFs are cross sold into the Asian market.
Exchange-Traded Collateralized Instruments (2.6%)
Exchange-Traded Commodities (ETCs, 0.8%)
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In Europe as UCITS III does not permit the creation of funds tracking nondiversified commodity indices (for example wheat or oil), exchange-tradedproducts that track single commodity profiles are issued under the EU ProspectusDirective in two structures that have become widely known as exchange-tradedcommodities (ETCs). ETCs can either be physically backed or they can beissued through a bankruptcy remote special purpose vehicle (SPV). Both formsutilize offshore domiciles, such as Jersey, and are classed as debt instruments.Physically-backed ETCs are fully backed with securities that closely resemble thecomposition of a product’s benchmark index. SPV structures are collateralized byassets which could bear no resemblance to those of their respective benchmarkindex and ensure replication of their index return through a total return swapstructure or by holding other derivative instruments such as futures. In the vastmajority of cases, both types of ETCs are fully collateralized with secure assetssuch as money market instruments, government bonds and gold. For moreinformation, please refer to our research report issued on March 11 2010 titled‘The race for assets in the European Exchange-Traded Products Market”.
Exchange-traded vehicles (ETVs, 1.8%)This terminology typically refers to grantor trusts that exist in the US market.These instruments track primarily commodity benchmarks. They differ fromETFs in that they are registered under the Securities Act of 1933 and not theinvestment Company Act of 1940, hence they are not classed as funds. Vehiclesthat replicate commodity benchmarks, more often known as pools, and fundstargeting alternative index returns are formed under the Commodities ExchangeAct and are listed under the 33 Securities Act, and report under 34 Corporate Act.
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Appendix 1
Important Disclosures
*Other information available upon request
*Prices are current as of the end of the previous trading session unless otherwise indicated and are sourced fromlocal exchanges via Reuters, Bloomberg, and other vendors. Other information is sourced from Deutsche Bank, subjectcompanies, and other sources. For disclosures pertaining to recommendations or estimates made on securities other thanthe primary subject of this research, please see the most recently published company report or visit our global disclosurelook-up page on our website at http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr. Aside from within this report,important conflict disclosures can also be found at https://gm/db.com/equities under the "Disclosures Lookup" and "Legal"tabs. Investors are strongly encouraged to review this information before investing.
Analyst Certification
The views expressed in this report accurately reflect the personal views of the undersigned lead analyst(s). In addition,the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendationor view in this report. Ari Rajendra, Sebastian Mercado
Hypothetical Disclaimer
Backtested, hypothetical or simulated performance results have inherent limitations. Unlike an actual performancerecord based on trading actual client portfolios, simulated results are achieved by means of the retroactive applicationof a backtested model itself designed with the benefit of hindsight. Taking into account historical events the backtestingof performance also differs from actual account performance because an actual investment strategy may be adjustedany time, for any reason, including a response to material, economic or market factors. The backtested performanceincludes hypothetical results that do not reflect the reinvestment of dividends and other earnings or the deduction ofadvisory fees, brokerage or other commissions, and any other expenses that a client would have paid or actually paid.No representation is made that any trading strategy or account will or is likely to achieve profits or losses similar tothose shown. Alternative modeling techniques or assumptions might produce significantly different results and prove tobe more appropriate. Past hypothetical backtest results are neither an indicator nor guarantee of future returns. Actualresults will vary, perhaps materially, from the analysis.
Equity Rating Key Equity rating dispersion and banking relationships
Buy: Based on a current 12- month view of total share-holderreturn (TSR = percentage change in share price from currentprice to projected target price plus pro-jected dividend yield ) ,we recommend that investors buy the stock.Sell: Based on a current 12-month view of total share-holderreturn, we recommend that investors sell the stock.Hold: We take a neutral view on the stock 12-months out and,based on this time horizon, do not recommend either a Buyor Sell.
Newly issued research recommendations and target pricessupersede previously published research.
1.Additional InformationInformation on ETFs is provided strictly for illustrative purposes and should not be deemed an offer to sell or asolicitation of an offer to buy shares of any fund that is described in this document. Consider carefully any fund'sinvestment objectives, risk factors, and charges and expenses before investing. This and other information can be foundin the fund's prospectus. Prospectuses about db X-trackers funds and Powershares DB funds can be obtained by calling1-877-369-4617 or by visiting www.DBXUS.com. Read prospectuses carefully before investing. Past performance is notnecessarily indicative of future results. Investing involves risk, including possible loss of principal. To better understandthe similarities and differences between investments, including investment objectives, risks, fees and expenses, it isimportant to read the products' prospectuses. Shares of ETFs may be sold throughout the day on an exchange throughany brokerage account. However, shares may only be redeemed directly from an ETF by authorized participants, in verylarge creation/redemption units. Transactions in shares of ETFs will result in brokerage commissions and will generatetax consequences. ETFs are obliged to distribute portfolio gains to shareholders. Deutsche Bank may be an issuer,advisor, manager, distributor or administrator of, or provide other services to, an ETF included in this report, for which itreceives compensation. db X-trackers and Powershares DB funds are distributed by ALPS Distributors, Inc. The opinionsexpressed are those of the authors and do not necessarily reflect the views of DB, ALPS or their affiliates.
Aside from within this report, important conflict disclosures can also be found at https://gm.db.com/equities under the"Disclosures Lookup" and "Legal" tabs. Investors are strongly encouraged to review this information before investing.
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If you use the services of Deutsche Bank in connection with a purchase or sale of a security that is discussed in this report,or is included or discussed in another communication (oral or written) from a Deutsche Bank analyst, Deutsche Bank mayact as principal for its own account or as agent for another person.
Deutsche Bank may consider this report in deciding to trade as principal. It may also engage in transactions, for itsown account or with customers, in a manner inconsistent with the views taken in this research report. Others withinDeutsche Bank, including strategists, sales staff and other analysts, may take views that are inconsistent with those takenin this research report. Deutsche Bank issues a variety of research products, including fundamental analysis, equity-linkedanalysis, quantitative analysis and trade ideas. Recommendations contained in one type of communication may differfrom recommendations contained in others, whether as a result of differing time horizons, methodologies or otherwise.Deutsche Bank and/or its affiliates may also be holding debt or equity securities of the issuers it writes on. Analysts arepaid in part based on the profitability of Deutsche Bank AG and its affiliates, which includes investment banking, tradingand principal trading revenues.
Opinions, estimates and projections constitute the current judgment of the author as of the date of this report. They donot necessarily reflect the opinions of Deutsche Bank and are subject to change without notice. Deutsche Bank providesliquidity for buyers and sellers of securities issued by the companies it covers. Deutsche Bank research analysts sometimeshave shorter-term trade ideas that are consistent or inconsistent with Deutsche Bank's existing longer term ratings. Tradeideas for equities can be found at the SOLAR link at http://gm.db.com. A SOLAR idea represents a high conviction beliefby an analyst that a stock will outperform or underperform the market and/or sector delineated over a time frame of noless than two weeks. In addition to SOLAR ideas, the analysts named in this report may from time to time discuss withour clients, Deutsche Bank salespersons and Deutsche Bank traders, trading strategies or ideas that reference catalystsor events that may have a near-term or medium-term impact on the market price of the securities discussed in this report,which impact may be directionally counter to the analysts' current 12-month view of total return or investment return asdescribed herein. Deutsche Bank has no obligation to update, modify or amend this report or to otherwise notify a recipientthereof if any opinion, forecast or estimate contained herein changes or subsequently becomes inaccurate. Coverage andthe frequency of changes in market conditions and in both general and company specific economic prospects make itdifficult to update research at defined intervals. Updates are at the sole discretion of the coverage analyst concerned or ofthe Research Department Management and as such the majority of reports are published at irregular intervals. This reportis provided for informational purposes only and does not take into account the particular investment objectives, financialsituations, or needs of individual clients. It is not an offer or a solicitation of an offer to buy or sell any financial instrumentsor to participate in any particular trading strategy. Target prices are inherently imprecise and a product of the analyst’sjudgment. The financial instruments discussed in this report may not be suitable for all investors and investors must maketheir own informed investment decisions. Prices and availability of financial instruments are subject to change withoutnotice and investment transactions can lead to losses as a result of price fluctuations and other factors. If a financialinstrument is denominated in a currency other than an investor's currency, a change in exchange rates may adverselyaffect the investment. Past performance is not necessarily indicative of future results. Unless otherwise indicated, pricesare current as of the end of the previous trading session, and are sourced from local exchanges via Reuters, Bloombergand other vendors. Data is sourced from Deutsche Bank, subject companies, and in some cases, other parties.
The Deutsche Bank Research Department is independent of other business areas divisions of the Bank. Details regardingour organizational arrangements and information barriers we have to prevent and avoid conflicts of interest with respectto our research is available on our website under Disclaimer found on the Legal tab.??Macroeconomic fluctuations often account for most of the risks associated with exposures to instruments that promiseto pay fixed or variable interest rates. For an investor who is long fixed rate instruments (thus receiving these cash flows),increases in interest rates naturally lift the discount factors applied to the expected cash flows and thus cause a loss.
The longer the maturity of a certain cash flow and the higher the move in the discount factor, the higher will be theloss. Upside surprises in inflation, fiscal funding needs, and FX depreciation rates are among the most common adversemacroeconomic shocks to receivers. But counterparty exposure, issuer creditworthiness, client segmentation, regulation(including changes in assets holding limits for different types of investors), changes in tax policies, currency convertibility(which may constrain currency conversion, repatriation of profits and/or the liquidation of positions), and settlement issuesrelated to local clearing houses are also important risk factors to be considered. The sensitivity of fixed income instrumentsto macroeconomic shocks may be mitigated by indexing the contracted cash flows to inflation, to FX depreciation, or tospecified interest rates – these are common in emerging markets. It is important to note that the index fixings may -- byconstruction -- lag or mis-measure the actual move in the underlying variables they are intended to track. The choice of theproper fixing (or metric) is particularly important in swaps markets, where floating coupon rates (i.e., coupons indexed toa typically short-dated interest rate reference index) are exchanged for fixed coupons. It is also important to acknowledgethat funding in a currency that differs from the currency in which coupons are denominated carries FX risk. Naturally,options on swaps (swaptions) also bear the risks typical to options in addition to the risks related to rates movements.??Derivative transactions involve numerous risks including, among others, market, counterparty default and illiquidity risk.The appropriateness or otherwise of these products for use by investors is dependent on the investors' own circumstancesincluding their tax position, their regulatory environment and the nature of their other assets and liabilities, and as such,investors should take expert legal and financial advice before entering into any transaction similar to or inspired by thecontents of this publication. The risk of loss in futures trading and options, foreign or domestic, can be substantial. As aresult of the high degree of leverage obtainable in futures and options trading, losses may be incurred that are greaterthan the amount of funds initially deposited. Trading in options involves risk and is not suitable for all investors. Priorto buying or selling an option investors must review the "Characteristics and Risks of Standardized Options”, at http://www.optionsclearing.com/about/publications/character-risks.jsp. If you are unable to access the website please contactyour Deutsche Bank representative for a copy of this important document.?
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