TRENDS IN THE EUROPEAN ETF INDUSTRY Detlef Glow Head of Lipper EMEA Research (ALL DATAAS OF MARCH, 31 2012)
TRENDS IN THE EUROPEAN ETF INDUSTRY
Detlef Glow
Head of Lipper EMEA Research
(ALL DATA AS OF MARCH, 31 2012)
Table of Content
�A brief history of ETFs in Europe 3
�Assets under management 7
�Fund flows – ETFs in Europe 15
Source: Lipper
�Structure of the European ETF market 18
�New ETFs 21
� The ETF death list 31
� Summary 35
� Disclaimer 37
EXCHANGE TRADED FUNDS IN EUROPE
A Brief History of ETFs in Europe
�2000 – Launch of ETFs in Europe (Merrill Lynch)
�2001 – SWAP based ETFs (Lyxor)
�2001 - Sector ETFs on MSCI Europe (State Street)
Source: Lipper
�2001 - Sector ETFs on MSCI Europe (State Street)
�2003 – Bond ETFs (Indexchange – iShares)
�2004 – ETFs on Emerging Markets
A Brief History of ETFs in Europe
� 2005 – Strategy ETFs (Lyxor)
�2005 – Commodity ETFs (EasyETF)
�2006 – Gold ETFs (backed with Gold) (ZKB)
Source: Lipper
�2006 – Gold ETFs (backed with Gold) (ZKB)
�2007 – Money Market – EONIA (db x-trackers)
�2007 – Short and leveraged ETFs
A Brief History of ETFs in Europe
�2007 – Strategy ETFs on credit spreads
�2008 –100 billion EUR in assets under management
�2009 – ETFs on hedge fund strategies
Source: Lipper
�2009 – ETFs on hedge fund strategies
�2010 – 200 billion EUR in assets under management
ASSETS UNDER MANAGEMENT
ETFs - Assets Under Management (10/2005 – 03/2012)
160
180
200
220
240
260
ETFs in Europe - Assets under Management (in Billion Euro)
Equity Bond Real Estate Other Commodities Money Market
Source: Lipper
0
20
40
60
80
100
120
140
ETFs - Assets Under Management (03/2011 – 03/2012)
140
160
180
200
220
240
260Equity Bond Real Estate Other Commodities Money Market
Source: Lipper
0
20
40
60
80
100
120
Assets Under Management
�Assets under management grew by 3.75% up to 230.71
billion Euro in 2011
�Assets under management grew by 8.71% up to 250.81
Source: Lipper
�Assets under management grew by 8.71% up to 250.81
billion Euro in Q1-2012
Promoter Market Share by AUM (31.03.2012)
iShares40.59%
CS ETF
Other Promoters
20.58%
State Street4.39%
Source: Lipper
db x-trackers13.96%
Lyxor11.78%
UBS3.62%
CS ETF5.07%
Promoter Market Share by AUM
60%
70%
80%
90%
100%
iShares Lyxor db x-trackers CS ETF UBS Other Promoters
Source: Lipper
0%
10%
20%
30%
40%
50%
Summary Assets Under Management
�The European ETF market is highly concentrated
�The top five ETF promoters account for 75.79% of AuM
�46 of the 1711 ETFs hold assets above 1 billion EUR
Source: Lipper
�46 of the 1711 ETFs hold assets above 1 billion EUR
� 23 equity funds
� 11 bond funds
� 9 commodity funds (8 gold, 1 silver)
� 2 money market funds
� 1 real estate linked equity fund
Summary Assets Under Management
�The largest ETF (iShares DAX) holds 5.05% of overall
AuM
�Top ten ETFs account for 25.94% of overall AuM
Source: Lipper
�Top twenty ETFs account for 36.26% of overall AuM
�Top 46 ETFs account for 49.11% of overall AuM
FUND FLOWS
ETF Fund Flows - 2011 (in Million Euro)
12,270.6
8,000.0
10,000.0
12,000.0
14,000.0
Source: Lipper
-331.6
3,522.3
-688.3
158.1
-2,000.0
-
2,000.0
4,000.0
6,000.0
Equity Bond Commodity Other Money Market
ETF Fund Flows – Q1/2012 (in Million Euro)
3,077.8
1,487.4 1,500.0
2,000.0
2,500.0
3,000.0
3,500.0
Source: Lipper
770.7
21.5
-992.8
-1,500.0
-1,000.0
-500.0
-
500.0
1,000.0
Equity Bond Commodity Other Money Market
MARKET STRUCTURE BY NUMBER OF FUNDS
ETFs in Europe by Fund Domiciles (31.03.2012)
Total Bond Equity Commodities Real Estate Money Market Other
Germany 117 29 81 1 3 2 1
France 397 47 273 12 8 4 53
Ireland 477 86 333 21 9 5 23
Luxembourg 573 75 333 39 9 19 98
Other 147 16 40 74 1 - 16
# 1711 253 1060 147 30 30 191
Source: Lipper
1293
418
0
200
400
600
800
1000
1200
1400
Primaries Non-Primaries
Market Share per Asset Type 31.03.2012
Equity64%
Bond20%
Real Estate1%
Other3%
Money Market2%
Commodities10%
Equity62%
Other11%
Money Market2%
Commodities9%
Real Estate2%
by Assets under Managementby Number of Funds
Source: Lipper
Bond15%
2%
NEW FUNDS LAUNCHED 2011
New ETFs Launched 2011
193
100
150
200
250
Source: Lipper
42 32
3
36
4
0
50
100
New ETFs Launched 2011
Total Bond Equity Commodities Real Estate Money Market O ther
Germany 34 5 28 - 1 - -
France 35 10 19 - - - 6
Ire land 91 15 52 18 - 2 4
Luxembourg 134 10 89 10 2 1 22
Source: Lipper
Luxembourg 134 10 89 10 2 1 22
O ther 16 2 5 8 1 - -
# 310 42 193 36 4 3 32
New ETFs Launched 2011 – Assets Under Management
5
6
7
8
9
10Equity Bond Real Estate Other Money Market Commodities
Source: Lipper
0
1
2
3
4
New ETFs Launched – Market Share by AUM (31.12.2012)
Bond17%
Real Estate1%
Other5% Money Market
1%
Commodities5%
Source: Lipper
Equity71%
NEW FUNDS LAUNCHED Q1/2012
New ETFs Launched – Q1/2012
Bond19
Equity31
20
25
30
35
2
7
Source: Lipper
19
Other7
Money Market1
Commodities4
Real Estate0
0
5
10
15
20
New ETFs Launched 2012– Assets Under Management
0.6
0.8
1Equity Bond Real Estate Other Commodities Money Market
Source: Lipper
0
0.2
0.4
New ETFs Launched 2012– Market Share by AUM
Equity22%
Real Estate0% Other
10%
Money Market1%
Commodities4%
Source: Lipper
Bond63%
New ETFs Launched 2012 - Activity by Promoter
Amundi1
SPDR5
Julius Baer5
Lyxor19
Source: Lipper
5
Ossiam2
Easy ETF1
db x-trackers16
UBS11
THE ETF DEATH LIST
Is the ETF Industry Going to Consolidate?
�542 ETFs in Europe are older than 3 years
�241 of these ETFs are smaller than 100 million Euro
Source: Lipper
These 241 ETFs might be under review for profitability
reasons by the fund promoters …
Is the ETF Industry Going to Consolidate?
… but, ETFs do not only generate income from
management fees. Other income like creation and
redemptions fees need also to be taken into account to
evaluate the profitability of an ETF.
Source: Lipper
evaluate the profitability of an ETF.
In addition some of these ETFs have been launched for
marketing reasons or to complete product ranges.
Is the ETF Industry Going to Consolidate?
�AuM is no valid measure to evaluate the profiability of an
ETF.
� Other reasons (complete product offering) might drive
Summary
Source: Lipper
� Other reasons (complete product offering) might drive
the decission making of fund promoters.
�No trend to consolidation in the ETF industry
foreseeable at the moment
SUMMARY
Summary
�The European ETF market is highly concentrated
�AuM in the ETF sector will continue to grow– growth rate will be lower
– impact from market movements will increase
Source: Lipper
– impact from market movements will increase
�Number of funds will also grow further
– not all markets have already covered by ETFs
– strategy ETFs may become more important
� ETF industry does not show a trend towards
consolidation
DISCLAIMER
© Thomson Reuters 2011 All Rights Reserved.
This presentation is for informational purposes only, and do not constitute investment advice or an offer to sell or the solicitation of an offer to buy any security of any entity in any jurisdiction.
No guarantee is made that the information in this presentation is accurate or complete and no warranties are made with regard to the results to
37
warranties are made with regard to the results to be obtained from its use.
In addition, Lipper will not be liable for any loss or damage resulting from information obtained from Lipper or any of its affiliates.