Silver ETF outflows hit record levels

Laurent Kssis at LaBranche Structured Products Europe (LSPE) discusses European ETF trades for the week ending 6 May.

Silver ETFs lost over 32.6m ounces of the precious metal last week, marking the largest weekly drop ever seen, as the price of silver tumbled.

With silver at $37 an ounce, redemptions of 32.6m ounces equates to outflows of around $1.2bn.

iShares Silver Trust and ZKB Silver recorded redemptions worth 25m ounces and 6m ounces respectively, after a week in which the silver spot price fell 12.7%.

Meanwhile, oil plummeted over 17% and we saw a sell-off across the sector particularly strong in the Dow Jones Stoxx 600 Optimised Oil & Gas ETFs from Source and iShares.

Despite the well-publicised meltdown across commodities though, we still saw five times more ETF buyers than sellers last week.

Funds tracking the German stock market received considerable attention, with iShares DAX (DE) reporting creation volumes of €2bn, while emerging markets also appear to be recovering well.

Our notional creation orders highlight solid block investments focused on global funds such as iShares' MSCI World and we expect assets in ETFs to have grown in early May.

We saw decent orders in Lyxor's ETF Russia and ETF Eastern Europe, with the issuer reporting creations of €14m and €23m respectively.

Korea ETFs from iShares and db x-trackers also fared well. Explanations vary as to the impetus behind these moves, but weak purchasing managers' index (PMI) figures in the developed world are likely to have contributed to the recovering profile of emerging markets investments.

Our primary market volumes were three times those seen in the previous week, probably due to investors returning to the market after two extended bank holiday weekends.

This report is not an offer to sell or a solicitation of any investment products or other financial product or service, an official confirmation of any transaction, or an official statement of LSPE.