June ETP launch review

New fund launches point to appetite for eurozone and Japanese equities

This report aggregatesnewlylaunchedfunds in June and highlights the performance of the fundslaunched in May.

• June saw 39 new ETFs added across 19 different issuers. ProShares launched the largest amount of funds, with eight new ETFs added to its portfolio
• 30 funds were launched in the Americas, six added in Emea and three launched in the Apac region
• Equity ETFs represented the majority of the funds launched in June, with 29 new funds. Five alternative ETFs were added, along with four fixed income and one commodity fund

June new listings

The eurozone market has proven to be a hotspot for ETF issuers as questions around the future of Greece and the euro continue to mount. Investors are seeking options to invest in the market and ETF issuers are more than willing provide these. Six ETFs which focused on Europe or a subsector of the European market were added in June. Out of these six, four offered a currency hedge to the US dollar to protect investors from exchange rate risk.

An additional six ETFs focused on the Japanese equity market, which has been a key area for investors as the yen continues to decline. Three of the funds are hedged against either the US dollar or the euro.

The popularity of hedging is best demonstrated by the fact that the top two funds seeing the largest year to date inflows (WisdomTree Europe Hedged Equity Fund with $14.34bn inflows, Deutsche X-trackers MSCI EAFE Hedged Equity ETF with $10.75bn inflows) are hedged against currency fluctuation. With this proven success, it is no surprise to see ETF issuers adding similar funds to their own portfolios to capture some of the market appetite.

May flows

Funds launched in May have gained a considerable amount of assets within their first couple of months in the market. In total, the 32 newly added ETFs have gained $2.12bn in new assets. The majority of these inflows went to the European listed equity ETFs.

Amundi added three ETFs that tracked the Nikkei 400 index in May. The difference in the funds was a daily hedge to either USD, GBP or EUR. While all three were the top performers for European funds launched in May, the biggest gainer was the Amundi ETF JPX-NIKKEI 400 UCITS ETF - DAILY HEDGED GBP which has added $724.5mn in assets since its inception. The EUR hedged version followed with $526mn inflows and the USD hedged variant gained $473mn.

The US listed ETFs that were added in May gained just over $158mn in new assets. The top earner was the Direxion Daily S&P Biotech Bull 3X Shares ETF which has gained $54mn in assets since its launch on May 28^th. These inflows were driven by strong momentum in the sector as the fund was up by as much as 20% at its highs during June.

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This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.