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For Financial Professionals. Not for Public Distribution. PROPRIETARY. Permission to reprint or distribute any content from this presentation requires the written approval of S&P Dow Jones Indices.
Expansion of ETP Markets and Product line-up of each region. TIGHTEN REGULATIONS FOR INDICES AND ITS EFFECT TO ETP
John Davies – Global Head of Exchange Traded Products
April 2015
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices. 2
GLOBAL ETF MARKET UPDATE
BACK TO BASICS – WHAT ARE ETFS & WHERE DID THEY COME FROM?
EVOLUTION OF ETFS – “WEST TO EAST”
01
02
03
04
05
ETF 1.0 VERSUS ETF 2.0
CHALLENGES & OPPORTUNITIES
DISCUSSION POINTS
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices.
Clients in 71 Countries, 19 Offices Worldwide, and Over 350 Client-Dedicated Professionals with Local Index Understanding
BM&FBOVESPA
BMV
Mexico City
MILA
New York Boston
Toronto TMX
CBOE
CME
Johannesburg
Madrid
Paris London
Munich
Dubai
BSE
NSE Mumbai
Singapore
Hong Kong
HKEx
Tokyo
JPX
Beijing
Seoul
KRX
ASX
Sydney
Country Location of Licensed Clients
Exchange Partner
S&PDJI Office
Listing Agreement
Milan
S. Brunswick
BVL
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices. 4
GLOBAL ETF MARKET UPDATE
BACK TO BASICS – WHAT ARE ETFS & WHERE DID THEY COME FROM?
EVOLUTION OF ETFS – “WEST TO EAST”
01
02
03
04
05
ETF 1.0 VERSUS ETF 2.0
CHALLENGES & OPPORTUNITIES
DISCUSSION POINTS
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices.
GLOBAL ETF & ETP ASSET GROWTH
5
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices.
GLOBAL ETF & ETP GROWTH BY REGION
6
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices.
GLOBAL TOP 20 ETF PROVIDERS BY ASSETS
7
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices.
GLOBAL TOP 20 ETFS BY NET FLOWS
8
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices.
GLOBAL TOP 20 ETF INDEX PROVIDERS
9
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JAPAN ETF & ETP GROWTH
10
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JAPAN WITHIN ASIA PACIFIC ETP MARKET
11
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JAPAN ETF/ETP PROVIDERS BY ASSETS
12
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JAPAN ETF/ETP PROVIDERS YTD FLOWS
13
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices.
JAPAN ETF/ETP INDEX PROVIDERS BY ASSETS
14
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices. 15
GLOBAL ETF MARKET UPDATE
BACK TO BASICS – WHAT ARE ETFS & WHERE DID THEY COME FROM?
EVOLUTION OF ETFS – “WEST TO EAST”
01
02
03
04
05
ETF 1.0 VERSUS ETF 2.0
CHALLENGES & OPPORTUNITIES
DISCUSSION POINTS
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices.
WHERE DID IT ALL BEGIN?
16
US – 1993, SPDR
S&P 500 ETF
(SPY) 1386
Europe – 2000, iShares
Euro STOXX 50 UCITS
ETF (EUN) 1477
Japan – 1995,
Nikkei 300 Stock
Index Listed Fund
(1319) 126
Canada – 1990, Toronto 35 Index
Participation Fund, now known as
the iShares S&P/TSX 60 Index
Fund (XIU) 355
Asia Pacific – 1999, HK
Tracker Fund (2800) 703
LatAm – 2002, iShares
NAFTRAC (NAFTRAC)
47
China – 2005, China
AMC China 50 ETF
(510050) 105
Australia – 2001, SPDR
S&P/ASX 200 (STW) 68
MEA – 2000,
SATRIX40
(STX40) 52
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WHAT ARE THE CHARACTERISTICS OF AN ETF?
17
ETFs are open-ended funds which are listed on an Exchange and offer
intra-day dual liquidity to access diversified investments in a transparent,
cheap, and tax efficient way:
• Fund
• Open-ended
• Exchange-traded
• Liquidity
• Tax Efficiency
• Transparency
• Low Cost
ETFs have Democratised Investing – giving institutional-style investment
access to the retail investor.
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WHERE DID IT ALL BEGIN?
18
19,224 TEU
1956
2015
A technology that transformed global trade
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices. 19
GLOBAL ETF MARKET UPDATE
BACK TO BASICS – WHAT ARE ETFS & WHERE DID THEY COME FROM?
EVOLUTION OF ETFS – “WEST TO EAST”
01
02
03
04
05
ETF 1.0 VERSUS ETF 2.0
CHALLENGES & OPPORTUNITIES
DISCUSSION POINTS
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices.
HOW DID WE GET THERE?
20
US
Large Cap
US
Fixed Income
US
Mid Cap
US
Small Cap
US
Sectors
Emerging
Fixed Income
Latam
Fixed Income
Canada
Large Cap
Canada
Fixed Income
US
Style
UK
Large Cap
UK
Fixed Income
Latam
Equity
Emerging
Markets Equity
VIX
Currency
Hedged
Japan
Fixed Income
Aus
Fixed Income
Aus
Large Cap
Japan
Large Cap
Property
Europe
Large Cap
Europe
Sectors Cash Asian
Equity
Asian
Fixed Income
Europe
Fixed Income
Commodity Single
Country Inverse &
Leverage
Asset Class & Strategy Exposure Expansion
Regional Exchange Listing Expansion
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REGIONAL ETF MARKET MATURITY
21
Mature
Nascent
US High level of ETF use
Proliferation of vanilla products slowing
Focus on niche exposures/strategies
Europe Moderate to increasing level of ETF use
Proliferation of products slowing
Focus on distribution
Increased Regulation
Asia Pacific Level of ETF use growing at varying rates
Proliferation of products beginning to increase
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Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices.
USA TOP 20 ETF/ETPS BY ASSETS
22
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USA TOP 20 ETF/ETPS BY ADTV
23
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USA TOP 20 ETFS BY NET INFLOWS YTD
24
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EUROPE TOP 20 ETFS BY ASSETS
25
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Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices.
EUROPE TOP 20 ETFS BY ADTV
26
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Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices.
EUROPE TOP 20 ETFS BY NET FLOWS YTD
27
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices.
JAPAN TOP 20 ETF/ETPS BY ASSETS
28
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices.
JAPAN TOP 20 ETFS BY ADTV
29
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices.
JAPAN TOP 20 ETF/ETPS BY NET FLOWS
30
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices. 31
GLOBAL ETF MARKET UPDATE
BACK TO BASICS – WHAT ARE ETFS & WHERE DID THEY COME FROM?
EVOLUTION OF ETFS – “WEST TO EAST”
01
02
03
04
05
ETF 1.0 VERSUS ETF 2.0
CHALLENGES & OPPORTUNITIES
DISCUSSION POINTS
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices.
SMART BETA FAMILY TREE
32
Diversity
Weighted Risk Parity
Equal
Weighted
Price
Weighted Minimum
Variance
Maximum
Diversification
Factor-
based
Indexing
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ETF 1.0 VERSUS ETF 2.0?
33
• Smart Beta/Active ETFs • As regulations address transparency, Smart Beta & Active ETFs are
beginning to expand and gain traction
• Convergence • Traditional Mutual Funds and ETFs continue to compete offering
investors access to a greater diversity of tools
• Constituency expansion • Institutional Investors, Hedge Funds were the early adopters, followed
by Advisors and Intermediaries – retail investors are next
• ETF Strategist and Robo-Advisors • New distribution opportunities with new business models
• Education • Continued education required from ETF Issuers, Index Providers as
ETFs become mainstream and evolve
• Global Expansion • Adoption is accelerating across Europe after economic/regulatory
instability and in Asia as barriers are coming down.
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices. 34
GLOBAL ETF MARKET UPDATE
BACK TO BASICS – WHAT ARE ETFS & WHERE DID THEY COME FROM?
EVOLUTION OF ETFS – “WEST TO EAST”
01
02
03
04
05
ETF 1.0 VERSUS ETF 2.0
CHALLENGES & OPPORTUNITIES
DISCUSSION POINTS
For Financial Professionals. Not for Public Distribution. PROPRIETARY.
Permission to reprint or distribute any content from this presentation requires the w ritten approval of S&P Dow Jones Indices.
CHALLENGES & OPPORTUNITIES
35
• Pricing • Not just about management fees
• Engagement • Closer alignment with Institutional investors will help strengthen
seeding and the ability to grow Etfs to scale
• Customisation • Innovation and customisation in the institutional space will help
Pension Funds and Insurance Cos embrace ETFs
• Education • Further education key for retail growth potential
• Transparency • As ETFs increase in sophistication and geograhical reach, full
transparency is imperative for investors to understand how ETFs
work and the risks involved
• Regulation
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CHALLENGES & OPPORTUNITIES
36
• Regulation
• SEC – ETMF/Active ETFs
• SEC – Derivatives
• ESMA – UCITS Guidelines
• IOSCO Benchmark Principles
• European Union Benchmark Regulation
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HERE’S TO THE NEXT 25 YEARS!
19 Years
1st US$ Tn
3.5 Years 2nd US$ Tn
2.5 Years 3rd US$ Tn
How long before 4th, 5th US$ Tn
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GENERAL DISCLAIMER
38
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GENERAL DISCLAIMER
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