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Short & Leveraged ETFs/ETPs Global Report (31 August 2013)

Global Assets Under Management

  • Despite outflows in other ETPs, The global Short & Leveraged (S&L) ETP industry remained at just over $51 billion of AUM during July and August
  • YTD, global S&L ETP AUM is up $6.8 billion or 15%
  • 56% of AUM is held in short products with leverage factors ranging between -1x to -3x. However the leverage factor with the most assets is +2x, with 34% of AUM. 44% of AUM is held in long products with leverage factors ranging between +1.5x to +3x
  • In terms of S&L asset allocation, equity ETPs are by far the most popular with 69% of AUM, followed by debt with 18% and commodities with 9%
  • The largest individual S&L ETPs are short U.S. Treasuries and short U.S. equities, with short U.S. equities having overtaken leverage U.S. equities

Short & Leverage Equities (Global)

  • Currently there is $35.1 billion of AUM held in S&L equity ETPs of which 54% is held in long ETPs and 46% is held in short ETPs
  • S&L equity ETPs experienced $2.5 billion of inflows in August. U.S. equity ETPs were the major winner with $2 billion in inflows, followed by Japan ($230 million), emerging markets ($139 million) and Europe ($114 million). YTD net inflows into equity ETPs total $7.5 billion
  • Inflows into U.S. equity ETPs were mixed with inflows into short and long ETPs although net positioning in August was bullish. Japanese equity ETP flows were bullish, dominated by inflows into long ETPs. European equities flows were bearish with net outflows from of long ETPs and inflows into short ETPs
  • At the end of the month, net positions shows that S&L equity ETP investors are overall bullish on Japanese equities, slightly bearish on emerging markets including China, neutral on U.S. equities and bearish on European equities

Short & Leverage Equities (Europe)

  • Currently there is $4.3 billion of AUM held in S&L equity ETPs tracking Europe or European countries of which 40% is held in long ETPs and 60% is held in short ETPs, with the largest positions being in German, broad Europe, French and Italian equities
  • European equity S&L ETPs experienced $114 million of net inflows in August in total. German and broad European equity S&L ETPs were the major winners with $54 million and $47 million of net inflows respectively. UK equity ETPs experienced net outflows of $10m
  • Flows in broad European, German, Italian and French S&L equities were all bearish with quite significant outflows from long ETPs and almost matching net inflows into short ETPs
  • Investors ended the month net bearish on German, French, U.K. and broad European equities and bullish on Italian, Swedish and Norwegian equities

Short & Leverage Debt (Global)

  • Currently there is $9.1 billion of AUM held in S&L debt ETPs of which 2% is held in long debt ETPs and 98% is held in short debt ETPs
  • There were $615 million of outflows from debt ETPs in August, however YTD there was $1 billion of net inflows. The U.S. was the major loser in August
  • August flows in U.S. debt were bearish and dominated by outflows of $710 million from long debt ETPs and inflows of $100 million into short debt ETPs
  • Investors ended the month positioned almost exclusively in short ETPs on US, European, German, Italian and Japanese debt

Short & Leverage Commodities (Global)

  • Currently there is $4.5 billion of AUM held in S&L commodity ETPs of which 59% is held in long commodity ETPs and 41% is held in short commodity ETPs
  • The S&L commodity ETPs with the most assets are those on oil, silver, gold and natural gas
  • Overall, S&L commodity ETPs experienced net inflows of $134 million, with the highest net inflows going to natural gas ($92 million mainly into long ETPs), silver ($61 million mainly into short ETPs) and oil ($49 million), and the highest outflow was from copper ($86 million out of short ETPs)

Precious Metals:

  • Gold S&L ETPs in August have seen net bullish flows with inflows into long gold ETPs and outflows from short gold ETPs, amounting to net long positioning of $113m. This continues a trend started around June, following the gold price correction prior to that
  • Silver saw bearish flows in August, with outflows from short silver ETPs offset slightly by inflows into long silver ETPs, amounting to net short positioning of $97m

Energy:

  • Oil ETP continue to be bearish, with net short positioning of $152m in August and around $2 billion net short since May
  • Natural gas flows also continued their trend since May, with bullish flows, amounting to net long positions of $113m in August and $945m since May

Industrial Metals

  • After being slightly bearish from Sep 2012 to June 2013, copper ETP positions have become decidedly bearish, with ETP investors redeeming short copper ETPs amounting to net long positions of $94m in August
Source: Gold Investors Become Bullish While Equity Investors Are Mixed, As Global Short And Leverage ETF/ETP Assets Hit Over $51bn