Asia ETPs hit YTD high; US less positive

The Asian exchange-traded product (ETP) market had inflows of $4bn during August, the record for monthly inflows so far this year.

August was the fourth month in a row with inflows or more than $2bn.

Despite volatility in the equity markets throughout the month, the majority of the inflows were in equity ETFs ($3.8bn), with Asia Pacific developed country ETFs, leveraged and short ETFs seeing the majority of that. Emerging country ETFs had outflows.

Gold exchange-traded products (ETPs) had inflows of $167mn during August, helped by falling markets.

At the end of the month, markets in Asia had risen on the previous week, with the exception of China -the CSI 300 was down 3.36% from the previous week. As the markets settled, turnover declined 14.4% on the previous week to $6.8bn, however, this is still an increase of more than 42% on last year's weekly average.

ETP news from the US is less positive. Inflows last week were just $434mn, compared to $8.2bn the previous week and risk appetite is still low.

Equity ETPs had outflows of $2.7bn, having seen large inflows the previous week. Money ($2.1bn) flowed into fixed income products and commodities remained flat.

Deutsche highlights a few trends which suggest that the risk-off mode is still fully in swing. Short equity ETPs recorded inflows of $1.2bn in the week to 2 September, long equity dividend and long equity non-dividend ETPs had inflows of $515mn and outflows of $3.3bn, respectively. Deutsche says this suggests that investors are bearish towards equities. There is also a re-positioning towards defensives.

As volatility decreased, turnover fell by 16.1% on the previous week. ETPs fared well overall with positive market performance (barring US equities) driving assets up $13bn compared to the previous week to close at $1.02trn.