Barclays Global Investors ETF Landscape Industry Preview - End Of August 2009

Below is a preview from our monthly ETF Landscape Industry Review which we are currently writing. The full report will be published in a few weeks. Please click here for a downloadable copy.

Global ETF and ETP Industry 2009:

• Global ETF assets have hit an all time high of US$891 bn at the end of August 2009 - 3.9% above the previous all time high of US$858 bn set in July 2009.
• At the end of August 2009 the Global ETF industry had 1,773 ETFs with 3,137 listings, assets of $890.52 billion, from 95 providers on 41 exchanges around the world.
• YTD assets have risen by 25.3% which is more than the 18.0% rise in the MSCI World index in USD terms.
• YTD the number of ETFs increased by 11.4% with 248 new ETFs launched, while 71 ETFs were closed.
• In Q2 the number of ETFs listed in Europe surpassed the US with 751 ETFs listed in Europe, compared to 710 in the US .
• There are currently plans to launch 781 new ETFs.
• YTD the number of exchanges with official listings decreased by two to 42.
• YTD the average daily trading volume in USD decreased by 22.7% to US$62.3 Billion.
• Standard & Poors (S&P) ranks 1st in terms of ETF AUM tied to their benchmarks with assets of US$217.27 Bn and 225 ETFs, while MSCI ranks 2nd with US$201.53 Bn and 253 ETFs, followed by Barclays Capital in 3rd with US$73.42 Bn and 59 ETFs.
• Globally, iShares is the largest ETF provider in terms of both number of products, 391 ETFs, and assets of US$429.32 Bn, reflecting 48.2% market share; State Street Global Advisors is second with 104 products and US$139.33 Bn, 15.6% market share; followed by Vanguard with 40 products and assets of US$71.71 Bn and 8.1% market share at the end of August 2009.
• Globally, net sales of mutual funds (excluding ETFs) were US$5.3 Bn, while net sales of ETFs were US$49.0 Bn during the first six months of 2009 according to Strategic Insight.
• Additionally, there were 566 other ETPs (Exchange Traded Products)1 with assets of US$92.07 Bn from 39 providers on 19 exchanges.
• Combined, there were 2,339 products with 3,971 listings, assets of US$982.60 Bn from 121 providers on 44 exchanges around the world.
• FINRA, the Financial Industry Regulatory Authority which regulates all securities firms doing business in the US , issued a regulatory notice in June 2009 to provide guidance on leveraged and inverse ETFs. The notice states that "...inverse and leveraged ETFs that are reset daily typically are unsuitable for retail investors who plan to hold them for longer than one trading session, particularly in volatile markets...".
• The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) issued an investor alert on Tuesday 18 August 2009 entitled ‘Leveraged and Inverse ETFs: Specialized Products with Extra Risks for Buy-and-Hold Investors’: The SEC staff and FINRA are issuing this Alert because we believe individual investors may be confused about the performance objectives of leveraged and inverse exchange-traded funds (ETFs). Leveraged and inverse ETFs typically are designed to achieve their stated performance objectives on a daily basis. Some investors might invest in these ETFs with the expectation that the ETFs may meet their stated daily performance objectives over the long term as well. Investors should be aware that performance of these ETFs over a period longer than one day can differ significantly from their stated daily performance objectives.
• U.S. Commodity Futures Trading Commission (CFTC) held hearings on Energy Position Limits and Hedge Exemptions on July 28, July 29 and August 5, on whether federal position limits should be set on the energy markets. The hearings provided critical input from a wide range of industry participants and academics to the Commission’s efforts to examine different approaches to regulate energy markets. The Commodity Exchange Act states that the Commission shall impose limits on trading and positions as necessary to eliminate, diminish or prevent the undue burdens on interstate commerce that may result from excessive speculation. The CFTC’s hearings examined the role of position limits in energy markets in fulfilling the CFTC’s mission to ensure the fair, open and efficient functioning of futures markets. Goldman Sachs, JPMorgan Chase and other leading banks are exempt from most commodity-trading limits in order to manage risks as they serve as market makers. The Commodity Futures Trading Commission is looking into whether those exemptions should stand, as it considers blanket limits on a variety of commodity markets. A number of ETPs/ ETFs providing exposure to commodities have recently issued notices that they have suspended their creation process.

European ETF and ETP Industry 2009:

• European ETF assets have hit an all time high of US$192 bn at the end of August 2009 which is 5.3% above the previous all time high of US$183 bn set in July 2009 and 20.2% above the high of US$160 bn recorded in July 2008.
• At the end of August 2009 the European ETF industry had 751 ETFs with 1,889 listings, assets of $192.10 Bn, from 33 providers on 19 exchanges.
• 11 April 2009 marked the ninth anniversary of ETFs in Europe .
• YTD assets have risen by 34.7%, which is greater than the 21.6% rise in the MSCI Europe index in USD terms.
• YTD the number of ETFs increased by 18.8% with 141 new ETFs launched.
• YTD the number of exchanges with official listings decreased by two to 19.
• YTD the average daily trading volume in US dollar has decreased by 0.1% to US$2.2 Bn. Most ETF trades are not required to be reported in Europe as ETFs are not covered by the European Union directive on markets in financial instruments (MiFID).
• iShares is the largest ETF provider in terms of both number of products, 158 ETFs, and assets of US$76.32 Bn, reflecting 39.7% market share; Lyxor Asset Management is second with 100 products and US$39.71 Bn, 20.7% market share; followed by db x-trackers with 105 ETFs and assets of US$31.19 Bn and 16.2% market share at the end of August 2009.
• In Europe net sales of mutual funds (excluding ETFs) were US$60.2 Bn while net sales of ETFs domiciled in Europe were US$15.2 Bn during the first six months of 2009 according to Lipper FMI.
• Additionally, there were 148 other ETPs (Exchange Traded Products) with assets of US$14.73 Bn from 4 providers on 6 exchanges.
• Combined, there were 899 products with assets of US$206.83 Bn from 35 providers on 19 exchanges in Europe.

U.S. ETF and ETP Industry 2009:

• US ETF assets have hit an all time high of US$607 bn at the end of August 2009 which tops the previous all time high of US$582 bn set in July 2009.
• At the end of August 2009 the US ETF industry had 710 ETFs, assets of $607.00 billion, from 22 providers on 3 exchanges.
• 29 January 2009 marked the 16th anniversary of ETFs in the US .
• YTD assets have risen by 22.1%, which is more than the 13.5% rise in the MSCI US index in USD terms.
• YTD the number of ETFs increased by 1.7% with 54 new ETFs launched, while 42 ETFs were delisted.
• YTD the average daily trading volume in US dollar has decreased by 25.1% to US$57.7 Bn.
• iShares is the largest ETF provider in terms of both number of products, 179 ETFs, and assets of US$321.36 Bn, reflecting 52.9% market share; State Street Global Advisors is second with 85 products and US$129.03 Bn, a 21.3% market share; followed by Vanguard with 39 products, assets of US$71.68 Bn and 11.8% market share at the end of August 2009.
• In the US, net sales of mutual funds (excluding ETFs) were minus US$50.5 Bn, while net sales of ETFs domiciled in the US were positive US$35.2 Bn in the first six months of 2009 according to Strategic Insight.
• Additionally, there were 136 other ETPs (Exchange Traded Products) with assets of US$71.39 Bn from 18 providers on 1 exchange.
• Combined, there were 846 products with assets of US$678.39 Bn from 36 providers on 3 exchanges in the US.