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Which ETFs are investors buying?
03 August 2010
Laurent Kssis at LaBranche Structured Products Europe (LSPE) discusses weekly European ETF trades Market makers were busier in the last week of July than they were earlier in the whole month, as global equities and their indices retreated from the previous week's levels. Our primary market activity was about on a par with the week before last. Creation orders outweighed redemptions by 4:1, with 50% in bond-related ETFs. Our secondary market activity was weighted a solid 9:4 in favour of buyers, again indicating strong inflows in ETFs. European and US investors continued to buy riskier fixed income and high yield/investment grade products from the US, including the iShares iBoxx $ High Yield Corporate Bond ETF (NYSE: HYG), SPDR Barclays Capital High Yield Bond (NYSE: JNK), iShares Barclays Aggregate Bond (NYSE: AGG) and iShares JP Morgan US Dollar Emerging Markets Bond fund (LSE: IEMB). There was also strong interest in three European corporate bond funds: the iShares GBP Corporate Bond (LSE: SLXX), iShares Euro Corporate Bond (LSE: IBCX) and iShares USD Corporate Bond (LSE: LQDE). In equity ETFs, we saw strong buyers of emerging markets funds, with iShares reporting creations of €54m in its iShares MSCI Emerging Markets ETF (LSE: IEEM) and MSCI World ETF (LSE: IWRD), and Lyxor reporting net creations of €100m in its MSCI World tracker (LSE: LWOR). There were still large sellers of MSCI Europe ETFs mostly those from Lyxor (NYSE Euronext: MEU), which reported €65m, StreetTRACKS (NYSE Euronext: ERO), and iShares (LSE: IMEU). We saw strong sellers of commodity trackers, such as the ETFS Crude Oil ETC (LSE: CRUD), which was down 1% last week, and the ETFS Agriculture DJ-AIGCSM ETC (LSE: AIGA), which was nevertheless up 4%. Meanwhile, we saw buyers of ETFS Wheat (LSE: WEAT), which rallied 11%. In terms of sectors, we saw sellers of funds tracking the travel and leisure sector (SXTP) and buyers of ETFs tracking chemicals (SX4P). We saw renewed interest in the broad banks index (SX7P), which was up 5% for the week. There was particular interest in European banks (SX7E), with iShares reporting creations of $43m in its iShares EuroStoxx Banks (DE) ETF, which was up 5.1%. Lastly, please bear in mind that the South Africa stock exchange will be closed next Monday 9 August, which will affect the pricing of related ETFs. This report is not an offer to sell or a solicitation of any investment products or other financial product or service, an official confirmation of any transaction, or an official statement of LSPE. Published by IFAonline
