Laurent Kssis at LaBranche Structured Products Europe (LSPE) discusses European ETF trades for the week ending 12 November
Investors' appetite for silver cranked up a notch last week. Having traded in a range of $15 to $20 an ounce for most of the year, the price of silver has jumped 40% to around $27 since late August.
Silver ETFs saw record inflows, with iShares adding 16.8 million ounces in the US. Silver-backed exchange-traded products have gone from starting out with nothing to about 14,000 metric tonnes - equivalent to almost seven months' worth of supply - in less than five years.
Last week also saw global markets retract slightly, showing the first real signs of a corrective price move since the start of September. The S&P 500 ended down 2.2% while the Eurostoxx 50 was down 1.9%. This decline was driven by tightening concerns in China and peripheral countries in Europe, especially Ireland with its fiscal situation.
The ETF bond markets saw outflows, with most of the primary market redemptions occurring in German Government Bond ETFs. The iShares eb.rexx Government Germany 5.5-10.5 and the iShares eb.rexx Government Germany 10.5+ saw redemptions amounting to €270m. We also made redemptions in the iShares Barclays Capital Euro Government Bond 7-10 and the iShares Euro Government Bond 1-3 ETFs.
Demand for high yield products remained strong last week with some of the largest creations in the iShares Markit iBoxx Euro High Yield reported since the fund's inception - iShares showed a solid intake of €45m in creation orders. The fund now has $300m in assets under management.
There has also been demand for the iShares Barclays Capital £ Index Linked Gilts, with volumes picking up both on and off-exchange.
Emerging markets ETFs are still experiencing robust demand. iShares reported combined intakes in excess of $200m in the iShares MSCI AC Far East ex-Japan and iShares MSCI EM Emerging Markets ($). Lyxor also reported intakes of €46m in its MSCI India ETF.
In terms of sectors, we saw solid two way flows in the Lyxor DJ Stoxx 600 Automobiles & Parts.
We have had a lot of queries about which funds track mid-cap indices and have helped execute orders in the iShares DJ Eurostoxx Mid Cap ETF, the Lyxor ETF MSCI EMU Small Caps and the iShares FTSE 250.
This Friday is also expiry for some equity options, which could result in continued increasing volatility.
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.
Paul Bruns and Elaine Parkes
3,000 left to transfer
Record numbers of people aged 90 plus
From 3 to 10 October