Market plunge removed over $40B from exchange-traded products

Volatility soared an impressive 26.19%

Coins, ETF Coins, ETF

Net Cash Flows Review

-Last week, the risk-off trade took another step towards consolidation. The US (S&P 500) retreated by 4.3%. Outside the US, the MSCI EAFE (in USD) and the MSCI EM (USD) dropped by 5.93% and 6.45%, respectively. Moving on to other asset classes, the 10Y Treasury yield retreated by 13bps last week and reached a new low of 1.71%, while the DB Liquid Commodity Index was down by 1.19%. The WTI Crude Oil, and the Silver prices did alike and fell by 4.84%, and 0.59%, respectively; while the Agriculture sector (DB Diversified Agriculture Index), and Gold showed some resilience recording positive moves of 3.14%, and 0.86%, respectively. Last but not least, Volatility (VIX) soared an impressive 26.19% during the same period.

  • The total US ETP flows from all products registered $1.7bn of inflows during last week vs $0.4bn of inflows the previous week, setting the YTD weekly flows average at +$2.8bn (+$55.3bn YTD in total cash flows).
  • Equity, Fixed Income, and Commodity ETPs experienced flows of -$0.5bn, +$2.0bn, and +$0.3bn last week vs. -$0.5bn, +$1.2bn, and -$0.2bn the previous week, respectively.
  • Within Equity ETPs, small cap and large cap products experienced the largest inflows (+$1.1bn, +$0.5bn respectively); while regional emerging markets vehicles experienced the largest outflows (-$1.0bn). Within Fixed Income ETPs, broad benchmark products recorded the largest inflows (+$1.1bn), followed by Sovereign products (+$1.0bn); while Corporates experienced outflows of $0.3bn. Within Commodity ETPs, Precious Metals products experienced the largest inflows (+$0.3bn).
  • Top 3 ETPs & ETNs by inflows: IWM (+$1.1bn), BND (+$0.8bn), IVV (+$0.4bn)
  • Top 3 ETPs & ETNs by outflows: XLF (-$0.8bn), VWO (-$0.5bn), HYG (-$0.4bn)

New Launch Calendar: No new listing during the previous week

Turnover Review: first week above last year’s weekly average

Total weekly turnover increased by 21.4% to $387bn vs. $319bn in the previous week, driven by soaring volatility. Last week’s turnover level was the first time weekly turnover has been above last year’s weekly average this year. The largest absolute increase was on Equity ETP turnover, which rose by $55.1bn or 19.2% to $342bn. Fixed Income ETP and Commodity ETP turnover followed with increases of 51.9% (+$7.3bn) and 26.4% (+$4.1bn), respectively.

Assets Under Management (AUM) Review: $41bn removed from ETP assets

The risk-off trade hit equity markets really hard during last week removing $41bn or 3.5% from ETP assets. Total ETP AUM shrank to $1.11 trillion at the end of last week. YTD growth dropped below the two-digits to 6.2%. Assets for equity, fixed income and commodity ETPs moved -$41.9bn, +$0.6bn, and +$0.5bn during last week, respectively.

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