Barclays Global Investors ETF Landscape Industry Preview - End Of Q3 2009

Below is a preview from Barclays Global Investors's monthly ETF Landscape Industry Review which BGI is 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 Exchange Traded Products "ETP" AUM breaks through US$1 trillion - all time high.
• Global ETF assets have hit an all time high of US$933 Bn at the end of Q3 2009 - 4.8% above the previous all time high of US$891 Bn set in August 2009.
• At the end of Q3 2009 the global ETF industry had 1,819 ETFs with 3,247 listings, assets of $933.49 Bn, from 96 providers on 40 exchanges around the world.
• YTD assets have risen by 31.3% which is more than the 22.5% rise in the MSCI World index in US dollar terms.
• YTD the number of ETFs increased by 14.3% with 295 new ETFs launched, while 72 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 811 new ETFs.
• YTD the number of exchanges with official listings decreased by three to 40. Standard & Poors (S&P) ranks first in terms of ETF AUM tied to their benchmarks with assets of US$220.83 Bn and 227 ETFs, while MSCI ranks second with US$214.80 Bn and 262 ETFs, followed by Barclays Capital in third with US$77.64 Bn and 62 ETFs.
• Globally, iShares is the largest ETF provider in terms of both number of products, 403 ETFs, and assets of US$451.87 Bn, reflecting 48.4% market share; State Street Global Advisors is second with 106 products and US$138.32 Bn, 14.8% market share; followed by Vanguard with 40 products and assets of US$77.15 Bn and 8.3% market share at the end of Q3 2009.
• Globally, net sales of mutual funds (excluding ETFs) were US$97.5 Bn, while net sales of ETFs were US$65.7 Bn during the first seven months of 2009 according to Strategic Insight.
• Additionally, there were 568 other Exchange Traded Products (ETPs) with assets of US$105.87 Bn from 39 providers on 19 exchanges.
• Combined, there were 2,387 products with 4,083 listings, assets of US$1,039.35 Bn from 122 providers on 43 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 following is taken from the Alert: 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$204 Bn at the end of Q3 2009 which is 6.3% above the previous all time high of US$192 Bn set in August 2009 and 27.8% above the high of US$160 Bn recorded in July 2008.
• At the end of Q3 2009 the European ETF industry had 783 ETFs with 1,946 listings, assets of $204.22 Bn, from 32 providers on 18 exchanges.
• 11 April 2009 marked the ninth anniversary of ETFs in Europe.
• YTD assets have risen by 43.2%, which is greater than the 27.4% rise in the MSCI Europe index in US dollar terms.
• YTD the number of ETFs increased by 23.9% with 174 new ETFs launched.
• YTD the number of exchanges with official listings decreased by three to 18.
• YTD the average daily trading volume in US dollars has increased by 18.8% to US$2.7 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, 167 ETFs, and assets of US$80.03 Bn, reflecting 39.2% market share; Lyxor Asset Management is second with 100 products and US$42.06 Bn, 20.6% market share; followed by db x-trackers with 113 ETFs and assets of US$33.71 Bn and 16.5% market share at the end of Q3 2009.
• In Europe net sales of mutual funds (excluding ETFs) were US$122.2 Bn while net sales of ETFs domiciled in Europe were US$19.2 Bn during the first seven months of 2009 according to Lipper FMI.
• Additionally, there were 148 other Exchange Traded Products (ETPs) with assets of US$16.35 Bn from four providers on six exchanges.
• Combined, there were 931 products with assets of US$220.57 Bn from 34 providers on 18 exchanges in Europe.

US ETF and ETP Industry 2009:

• US ETF assets have hit an all time high of US$631 Bn at the end of Q3 2009 which tops the previous all time high of US$607 Bn set in August 2009.
• At the end of Q3 2009 the US ETF industry had 721 ETFs, assets of $631.35 Bn, from 24 providers on three exchanges.
• 29 January 2009 marked the 16th anniversary of ETFs in the US.
• YTD assets have risen by 27.0%, which is more than the 17.7% rise in the MSCI US index in US dollar terms.
• YTD the number of ETFs increased by 3.3% with 65 new ETFs launched, while 42 ETFs were delisted.
• YTD the average daily trading volume in US dollars has decreased by 24.9% to US$57.8 Bn.
• iShares is the largest ETF provider in terms of both number of products, 182 ETFs, and assets of US$337.25 Bn, reflecting 53.4% market share; State Street Global Advisors is second with 87 products and US$127.34 Bn, a 20.2% market share; followed by Vanguard with 39 products, assets of US$77.10 Bn and 12.2% market share at the end of Q3 2009.
• In the US, net sales of mutual funds (excluding ETFs) were minus US$50.8 Bn, while net sales of ETFs domiciled in the US were positive US$47.4 Bn in the first seven months of 2009 according to Strategic Insight.
• Additionally, there were 137 other Exchange Traded Products (ETPs) with assets of US$75.35 Bn from 18 providers on one exchange.
• Combined, there were 858 products with assets of US$706.70 Bn from 38 providers on three exchanges in the US.