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european etf assets up 15 per cent in a year

Assets under management in the European exchange traded fund industry grew to 263.57bn in the second quarter of 2013, an increase of 34.84bn or 15.23% over the previous year, according to Lipper

However, the study also showed the growth rate for ETFs slowed considerably in 2013. From December to June, the European ETF industry grew by just 1.95%. Lipper said his reflected overall market sentiment and high comparative levels of assets under management.

The research also showed the European ETF industry remains concentrated in a small number of flagship funds: just 41 of the 1,743 ETFs hold assets of more than €1bn. The majority of these (28) are equity funds, with the largest fund in the universe – iShares DAX – accounting for more than 5% of overall European ETF assets under management.

The remaining billion-euro-plus ETFs comprise 11 bond and two physical gold strategies. The ten largest ETFs account for around a quarter of the market.

Glow: ‘more launches likely’

The total number of ETFs shrank during the first six months of the year, with 38 launches and 56 closures. Some commentators took this as a sign of consolidation in the industry, but Detlef Glow, head of Lipper EMEA research, said: “This means the industry has matured and there are not so many ‘white spots’ left where fund promoters can place new products.

“From my point of view it is only a sign of a mature industry, where promoters need to clear out their product ranges before they launch new ETFs. Therefore, I expect the number of available ETFs will increase by the end of 2013.”

Takeovers and new entrants

He added: “After the takeover of Credit Suisse ETF by iShares it seems to be pretty clear that the overall ETF landscape in Europe will change over time. There might be further takeovers or other events that will put established promoters out of business, while on the other hand new ETF promoters such as First Trust will enter the market.

“The further clearing of product ranges, where unprofitable products are taken off the market, and the ongoing launch activities of promoters will change the product ranges, with a trend toward more granularity.”

Other findings:

  • Luxembourg and Ireland remain the dominant domiciles for European ETFs, followed by France; and
  • Physical replication continues to be preferred to synthetic replication.

A PDF of the Q2 2013 Lipper European ETF market review can be downloaded from the company’s website, here.

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