Deutsche Bank Markets Research Asia Synthetic Equity & Index Strategy Date 9 July 2015 Asia Pac Monthly ETF Market Review Author Inflows to Japan & Taiwan ETFs Shan Lan Strategist Offset China ETF Outflows (+852) 22036716 [email protected] Data in this report is as of 30th June 2015 Team Contacts Global ETP assets at $2.82 trillion, YTD growth at 7% As of the end of June, global ETP assets reached to $2.82 tn. On a year-to-date Ari Rajendra basis, global ETP market is up by $185bn or 7%. Asia-Pac listed ETP assets Strategist closed the month at $234.6bn with 16% YTD gain, highest among all the (+44) 20 754-52282 regions (USD terms). Global ETP flows totalled +$24.6bn in June led by US [email protected] (+$17.8bn) followed by Asia-Pac (+$5bn) and Europe (+$1.6bn). Offshore ETFs listed globally with investment focus in Asia-Pacific: Inflows into Sebastian Mercado Japan and South Korea focused ETFs Strategist Among globally listed equity ETFs, those tracking DM benchmarks registered (+1) 212 250-8690 inflows of +$1.3bn in June vs. +$1.7bn in the previous month. This was driven [email protected] by Japan focused ETFs collecting +$1.5bn over the last month. EM benchmarked ETFs continued previous month’s trend and registered inflows of +$0.3bn for the month of Jun’15. Within EM, South Korea and EM broad Related recent research Date focused ETFs saw major activity and collected inflows of +$197mn and China In Global Indices - Are You 08 Jun 2015 +$126mn respectively during last month. Ready for the Upcoming Offshore China focused ETFs experiencing heavy redemptions since October Changes? Shan Lan 2014 coinciding with the launch of Shanghai-Hong Kong Stock Connect in Source: Deutsche Bank November last year. Since then, flows for ETFs tracking A-shares and H-shares have moved in opposite directions for most of the months. A-share ETFs see outflows on continuous basis while H-share ETFs gradually attracted new money. This was most evident in the 2015 as H-share & others ETFs received +$7.4bn of inflows while A-share ETFs experienced -$12bn of outflows so far this year including +$0.7bn (H-share & others) & -$1.1bn (A-share) of flows in June’15. This is partially because Investors are still using the ETFs as a quick way to sell A-shares and buy cheaper H-shares counterpart. Asia-Pac Listed ETP Flows: Japan and Taiwan focused ETFs registered healthy inflows Asia-Pacific ETPs comes into positive territory in terms of net flows at the end of June. These ETPs experienced inflows of +$5bn last month (+$4.7bn in May’15) bringing YTD flows total to +$5bn. Majority of the region’s inflows were from equity ETFs recording +$4.6bn in new money followed by inflows into fixed income ETFs (+$552mn). Within equity, Japan and Taiwan focused ETFs registered inflows of +$3.5bn and +$3.3bn respectively while China and South Korea focused ETFs experienced outflows of -$3.1bn and -$0.5bn during Jun’15. Among other equity segments, leveraged long strategy ETFs witnessed notable inflows of +$1.8bn in the month of June. New ETP launches – Busy month with 15 new launches Asia-Pacific ETP market witnessed 15 new product launches including 13 ETFs and 2 ETCs during the month of June. ________________________________________________________________________________________________________________ Deutsche Bank AG/Hong Kong 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) 124/04/2015. 9 July 2015 Asia Pac Monthly ETF Market Review Table Of Contents 1. Investment Trends ....................................................................... 3 Monthly Review for Asia-Pac Listed ETFs .............................................................................. 3 Performance and growth of ETFs listed globally with investment focus in Asia-Pac ............. 4 Offshore equity ETFs listed globally with investment focus in Asia-Pacific ............................ 5 ETP flow summary – Other markets ....................................................................................... 7 2. Asia-Pac Listed ETPs – Market Overview ................................... 8 Country Breakdown .............................................................................................................. 10 Issuer Rankings..................................................................................................................... 11 3. ETP – Net Cash Flows ................................................................ 18 Investment Focus ................................................................................................................. 18 Sub Segment ........................................................................................................................ 19 Issuer .................................................................................................................................... 21 Index Provider ....................................................................................................................... 23 Underlying Index/Security ..................................................................................................... 24 Top ETPs ............................................................................................................................... 25 4. ETP – Turnover ........................................................................... 26 Investment Focus ................................................................................................................. 26 Sub Segment ........................................................................................................................ 27 Exchange .............................................................................................................................. 29 Issuer .................................................................................................................................... 30 Index Provider ....................................................................................................................... 31 Underlying Index/Security ..................................................................................................... 31 Top ETPs ............................................................................................................................... 32 5. ETP – Assets under Management ............................................. 33 Investment Focus ................................................................................................................. 33 Sub Segment ........................................................................................................................ 34 Issuer .................................................................................................................................... 36 Index Provider ....................................................................................................................... 37 Underlying Index/Security ..................................................................................................... 37 Top ETPs ............................................................................................................................... 38 Appendix A: Useful Information ................................................... 40 Appendix B: Glossary..................................................................... 41 Appendix C: How we define ETPs ................................................ 42 Page 2 Deutsche Bank AG/Hong Kong 9 July 2015 Asia Pac Monthly ETF Market Review 1. Investment Trends Monthly Review for Asia-Pac Listed ETFs Market Review Last month, all the major equity markets in the Asia-Pac region remained in negative territory. Following is the snapshot of major benchmarks’ recent performance: June - 15 May - 15 Benchmarks YTD (MoM) (MoM) Japan (Nikkei 225) -1.59% 5.34% 15.96% South Korea (KOSPI2) -3.12% -2.26% 3.37% China (CSI 300) -7.60% 1.91% 26.58% Taiwan (TWSE) -3.90% -1.21% 0.17% Hong Kong (HSI) -4.28% -2.52% 11.21% India (Sensex) -0.17% 3.03% 1.02% Singapore (FSSTI) -2.20% -2.73% -1.42% Australia (S&P/ASX 200) -5.51% -0.22% 0.89% Source: Deutsche Bank, Bloomberg Finance LP Asia-Pac Listed ETP Flows: Japan and Taiwan focused ETFs registered healthy inflows while China saw outflows Asia-Pacific ETPs comes into positive territory in terms of net flows at the end of June. These ETPs experienced inflows of +$5bn last month (+$4.7bn in May’15) bringing YTD flows total to +$5bn. Majority of the region’s inflows were from equity ETFs recording +$4.6bn in new money followed by inflows into fixed income ETFs (+$552mn). Within equity, Japan and Taiwan focused ETFs registered inflows of +$3.5bn and +$3.3bn respectively while China and South Korea focused ETFs experienced outflows of -$3.1bn and -$0.5bn during Jun’15. Among other equity segments, leveraged long strategy ETFs witnessed notable inflows of +$1.8bn in the month of June. Within fixed income, money market bond ETFs attracted +$447mn in new money. While among commodities, crude oil based ETPs, recorded outflows of -$153mn in June. Wins and losses: At ETP level, largest inflows were received by China 50 ETF (510050 CH), Yuanta/P-Shares Taiwan Top