ETP Marketplace Highlights. February 2018

Transcription

1 ETP Marketplace Highlights February 2018

2 Highlights from the Month February 2018 Product Evolution Launches: 23 New Filings: 10 Announced Modifications*: 31 Announced Closures: 10 First ETP Outflows in 2 years ETPs experienced monthly outflows for the first time since January 2016 Vanguard Launches Active Factor ETPs Vanguard launched 6 actively-managed factor-based ETPs WisdomTree ETP Closures WisdomTree announced the liquidation of 9 ETPs, 10% of its fund lineup by count PowerShares Rebranding Invesco will be unifying several brands, including Powershares, under the Invesco brand Global X Acquisition Mirae Asset Global Investments announced the purchase of Global X, expected to close Q3 VIX ETN Closure VelocityShares XIV, with $1.9 billion AUM, closed after falling 96.3% in a single day * Modifications refer to index changes, name changes, OER reductions, advisor/sub-advisor changes, etc. Only ETPs and affiliated ETPs within the same product suite with AUMs > $250M are covered in Modifications See Appendix for a list of launches, filings, modifications, closures and exemptive relief applications and grants and the sources for such information Please see the final slide for definitions Charles Schwab Investment Management, Inc. For Institutional Use Only 1

3 Assets and Flows February 28, 2018 Total ETP AUM February 2018 ETP AUM Change February 2018 ETP Net Flows YTD 2018 ETP Net Flows* Assets: $3.54 Trillion Assets: -$107.9 Billion Flows: -$4.4 Billion Flows: $63.6 Billion Assets ($B) $3,900.0 $3,700.0 $3,500.0 $3,300.0 $3,100.0 $2,900.0 $2,813.0 $2,878.4 $2,932.1 $2,978.4 $3,060.0 $3,081.7 $3,154.3 $3,267.2 $3,357.7 $3,444.9 $3,645.4 $3,537.5 $2,700.0 March April May June July August September October November December January 2018 February 2018 Flows ($B) $80.0 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $0.0 -$10.0 -$20.0 $47.9 March $34.8 $32.7 April May $45.5 June $24.6 July $29.9 $28.2 August September $54.9 October $35.5 November $52.0 December $68.1 January $4.4 February 2018 *YTD flows according to ETF.com s February 2018 Monthly ETF Flows Report, published on March 1, YTD flows may differ from aggregated flows from prior months, which may result from adjustments made to monthly flows after each Monthly ETF Flows Report was issued by the data provider. Any such adjustments are not reflected in the monthly flows chart. Source: ETF.com and FactSet, as of February 28, 2018 Charles Schwab Investment Management, Inc. For Institutional Use Only 2

4 Top 20 League Table State Street experienced almost $26 billion in net outflows, largely due to SPY BlackRock, Vanguard and Schwab ETFs led all net flows, capturing a combined $17 billion Van Eck and Fidelity were the only two issuers to see a positive change in AUM for February 02/28/ /31/2018 M-O-M Change YTD Rank in Rank Sponsor AUM % of Total AUM % of Total in AUM Net Flows Net Flows 1 - BlackRock 1,390, % 1,420, % -29, , , Vanguard 880, % 898, % -18, , , State Street Global Advisors 629, % 674, % -44, , , Invesco 143, % 146, % -3, Schwab ETFs 105, % 105, % , , First Trust 61, % 61, % , WisdomTree 45, % 47, % -2, , Guggenheim 39, % 40, % -1, Van Eck 36, % 35, % , , ProShares 30, % 32, % -1, , , FlexShares 16, % 16, % PIMCO 15, % 15, % ALPS 13, % 15, % -1, Direxion 13, % 13, % Deutsche Bank 12, % 13, % Fidelity 10, % 10, % , Global X 9, % 10, % , Barclays 7, % 7, % Goldman Sachs 7, % 7, % UBS 7, % 7, % Source: ETF.com and FactSet, as of February 28, 2018 Charles Schwab Investment Management, Inc. For Institutional Use Only 3

5 Flows and Assets by Asset Class Almost $4.4 billion flowed out of ETPs in February, the first monthly outflow since January 2016, after the industry saw record monthly inflows of $68 billion just one month earlier in January U.S. Equity had by far the largest outflows with over $21 billion leaving the asset category, while International Equity continued to post large inflows of almost $13 billion Leveraged ETPs saw over $1.5 billion in net flows 02/28/ /31/2018 M-O-M Change YTD Asset Category AUM % of Total AUM % of Total Change in AUM Net Flows Net Flows U.S. Equity 1,964, % 2,045, % -80, , ,502.1 International Equity 854, % 872, % -17, , ,591.6 U.S. Fixed Income 520, % 523, % -3, , ,905.5 International Fixed Income 62, % 63, % ,753.2 Commodities 69, % 70, % ,195.4 Currency 1, % 1, % Leveraged 36, % 37, % -1, , ,168.4 Inverse 13, % 16, % -3, ,366.4 Asset Allocation 8, % 9, % Alternatives 4, % 4, % Total: 3,537, % 3,645, % -107, , ,565.8 Source: ETF.com and FactSet, as of February 28, 2018 Charles Schwab Investment Management, Inc. For Institutional Use Only 4

6 Top ETP Net Flows - February U.S. stock market volatility had SPY seeing large outflows with over $19 billion leaving the ETF, while competitor S&P 500 ETPs, IVV and VOO, saw inflows The ishares Core MSCI EAFE ETF (IEFA), led all inflows with over $6.9 billion coming into the fund, while the higher-priced ishares MSCI EAFE ETF (EFA) saw over $3.7 billion leaving the fund The ProShares Short VIX Short-Term Futures ETF (SVXY) saw inflows of almost $1.5 billion after Credit Suisse s competitor fund, VelocityShares Daily Inverse VIX Short-Term ETN (XIV), closed Top 10 Net Inflows Ticker Name Sponsor February 2018 AUM February 2018 Flows IEFA ishares Core MSCI EAFE ETF BlackRock 52, ,901.2 IVV ishares Core S&P 500 ETF BlackRock 156, ,303.2 AGG ishares Core U.S. Aggregate Bond ETF BlackRock 55, ,245.5 VOO Vanguard S&P 500 ETF Vanguard 90, ,606.0 IEMG ishares Core MSCI Emerging Markets ETF BlackRock 49, ,485.1 SVXY ProShares Short VIX Short-Term Futures ETF ProShares ,462.5 VEA Vanguard FTSE Developed Markets ETF Vanguard 71, ,155.3 SHV ishares Short Treasury Bond ETF BlackRock 9, ,069.4 EWJ ishares MSCI Japan ETF BlackRock 22, VT Vanguard Total World Stock ETF Vanguard 11, Top 10 Net Outflows February 2018 AUM February 2018 Flows Ticker Name Sponsor SPY SPDR S&P 500 ETF Trust State Street Global Advisors 278, ,400.7 EFA ishares MSCI EAFE ETF BlackRock 80, ,760.9 LQD ishares iboxx $ Investment Grade Corporate Bond ETF BlackRock 32, ,234.9 JNK SPDR Bloomberg Barclays High Yield Bond ETF State Street Global Advisors 8, ,509.3 EMB ishares JP Morgan USD Emerging Markets Bond ETF BlackRock 11, ,847.3 SDY SPDR S&P Dividend ETF State Street Global Advisors 15, ,549.7 XLI Industrial Select Sector SPDR Fund State Street Global Advisors 13, ,405.2 IWD ishares Russell 1000 Value ETF BlackRock 37, ,378.6 XLK Technology Select Sector SPDR Fund State Street Global Advisors 20, ,249.1 IWM ishares Russell 2000 ETF BlackRock 40, ,217.8 Source: ETF.com and FactSet, as of February 28, 2018 Charles Schwab Investment Management, Inc. For Institutional Use Only 5

7 Disclosures Investors should consider carefully information contained in the prospectus or, if available, the summary prospectus, including investment objectives, risks, charges and expenses. You can obtain a prospectus by visiting or calling Please read the prospectus carefully before investing. Investment returns will fluctuate and are subject to market volatility, so that an investor s shares, when redeemed or sold, may be worth more or less than their original cost. Some specialized exchanged-traded funds can be subject to additional market risks. Unlike mutual funds, shares of ETFs are not individually redeemable directly with the ETF. Shares of ETFs are bought and sold at market price, which may be higher or lower than the net asset value (NAV). ETPs mentioned are for informational purposes and not an offer to buy or sell a particular security. Data here is obtained from what are considered reliable sources; however, its accuracy, completeness or reliability cannot be guaranteed. Charles Schwab Investment Management, Inc. (CSIM) is the investment advisor for Schwab ETFs. Schwab ETFs are distributed by SEI Investments Distribution Co. (SIDCO). SIDCO is not affiliated with CSIM Charles Schwab Investment Management, Inc. All rights reserved GGB MARS MKT Charles Schwab Investment Management, Inc. For Institutional Use Only 6

8 Appendix February 2018

9 ETP Launches Ticker Name Sponsor Exchange Net OER Launch Date RPUT WisdomTree CBOE Russell 2000 PutWrite Strategy Fund WisdomTree CBOE 0.43% 2/1/2018 KURE KraneShares MSCI All China Health Care Index ETF KraneShares NYSE Arca 0.79% 2/1/2018 IDIV Metaurus Advisors U.S. Equity Cumulative Dividends Fund Series 2027 Metaurus Advisors NYSE Arca 0.58% 2/6/2018 XDIV Metaurus Advisors U.S. Equity Ex-Dividend Fund Series 2027 Metaurus Advisors NYSE Arca 0.29% 2/6/2018 FLIN Franklin FTSE India ETF Franklin Templeton NYSE Arca 0.19% 2/8/2016 FLRU Franklin FTSE Russia ETF Franklin Templeton NYSE Arca 0.19% 2/8/2016 FLAX Franklin FTSE Asia ex Japan ETF Franklin Templeton NYSE Arca 0.19% 2/8/2016 FLSW Franklin FTSE Switzerland ETF Franklin Templeton NYSE Arca 0.09% 2/8/2016 EKAR Innovation Shares NextGen Vehicles & Technology ETF Innovation Shares NYSE Arca 0.65% 2/13/2018 USDY Horizons Cadence Hedged US Dividend Yield ETF Horizons ETFs CBOE 0.68% 2/14/2018 VFLQ Vanguard U.S. Liquidity Factor ETF Vanguard CBOE 0.13% 2/15/2018 VFMO Vanguard U.S. Momentum Factor ETF Vanguard CBOE 0.13% 2/15/2018 VFMV Vanguard U.S. Minimum Volatility ETF Vanguard CBOE 0.13% 2/15/2018 VFQY Vanguard U.S. Quality Factor ETF Vanguard CBOE 0.13% 2/15/2018 VFVA Vanguard U.S. Value Factor ETF Vanguard CBOE 0.13% 2/15/2018 VFMF Vanguard U.S. Multifactor ETF Vanguard CBOE 0.18% 2/15/2018 PPMC Portfolio+ S&P Mid Cap ETF Direxion NYSE Arca 0.40% 2/15/2018 PPDM Portfolio+ Developed Markets ETF Direxion NYSE Arca 0.47% 2/15/2018 PPEM Portfolio+ Emerging Markets ETF Direxion NYSE Arca 0.40% 2/15/2018 PPTB Portfolio+ Total Bond Market ETF Direxion NYSE Arca 0.34% 2/15/2018 Sources: NYSE Arca, BATS, NASDAQ, Strategic Insight, FUSE, ETF.com, Morgan Stanley Smith Barney, Ignites, ETFTrends and Company websites Charles Schwab Investment Management, Inc. For Institutional Use Only 8

10 ETP Launches (Cont d) Ticker Name Sponsor Exchange Net OER Launch Date ROBT First Trust Nasdaq Artificial Intelligence and Robotics ETF First Trust NASDAQ 0.65% 2/22/2018 VSL Volshares Large Cap ETF Whitford Asset Management NYSE Arca 0.65% 2/23/2018 BOON NYSE Pickens Oil Response ETF TriLine Index Solutions NYSE Arca 0.85% 2/28/2018 Sources: NYSE Arca, BATS, NASDAQ, Strategic Insight, FUSE, ETF.com, Morgan Stanley Smith Barney, Ignites, ETFTrends and Company websites Charles Schwab Investment Management, Inc. For Institutional Use Only 9

11 ETP Filings Name Direxion Daily Lithium Bull 2X Shares ETF Direxion Daily Robotics & Artificial Intelligence Bull 2X Shares ETF Direxion Daily Preferred Stock Bull 2X Shares ETF Direxion Daily Lithium Bull 3X Shares ETF Direxion Daily Robotics & Artificial Intelligence Bull 3X Shares ETF Direxion Daily Preferred Stock Bull 3X Shares ETF First Trust Dorsey Wright DALI 1 ETF Salt trubeta High Exposure ETF USCF Commodity Strategy ETF WisdomTree 90/60 US Balanced ETF Sponsor Direxion Direxion Direxion Direxion Direxion Direxion First Trust Salt Financial USCF Advisers WisdomTree Sources: NYSE Arca, BATS, NASDAQ, Strategic Insight, FUSE, ETF.com, Morgan Stanley Smith Barney, Ignites, ETFTrends and Company websites Charles Schwab Investment Management, Inc. For Institutional Use Only 10

12 Announced ETP Modifications Vanguard Announced on February 1, 2018, a name and index change in the following ETP effective immediately Previous New Ticker VNQ VNQ Fund Name Vanguard REIT ETF Vanguard Real Estate ETF Index Name MSCI US REIT Index MSCI US Investable Market Real Estate 25/50 Transition Index Direxion Announced on February 5, 2018, name and ticker changes in the following ETPs effective February 15, 2018 Previous New Ticker LLSC PPSC Fund Name Direxion Daily Small Cap Bull 1.25X Shares Portfolio+ S&P Small Cap ETF Index Name S&P SmallCap 600 Index S&P SmallCap 600 Index Previous New Ticker LLSP PPLC Fund Name Direxion Daily S&P 500 Bull 1.25X Shares Portfolio+ S&P 500 ETF Index Name S&P 500 Index S&P 500 Index Sources: NYSE Arca, BATS, NASDAQ, Strategic Insight, FUSE, ETF.com, Morgan Stanley Smith Barney, Ignites, ETFTrends and Company websites Charles Schwab Investment Management, Inc. For Institutional Use Only 11

13 Announced ETP Modifications (Cont d) ETFMG Announced on February 5, 2018, a ticker change in the following ETP effective February 9, 2018 Name Previous Ticker New Ticker ETFMG Alternative Harvest ETF MJX MJ Hartford Announced on February 7, 2018, OER changes in the following ETPs effective February 15, 2018 Ticker Name Previous OER New OER RODM Hartford Multifactor Developed Markets (ex-us) ETF 0.39% 0.29% ROAM Hartford Multifactor Emerging Markets ETF 0.59% 0.49% ROGS Hartford Multifactor Global Small Cap ETF 0.55% 0.39% LVIN Hartford Multifactor Low Volatility International Equity ETF 0.39% 0.29% LVUS Hartford Multifactor Low Volatility US Equity ETF 0.29% 0.19% ROUS Hartford Multifactor US Equity ETF 0.29% 0.19% Sources: NYSE Arca, BATS, NASDAQ, Strategic Insight, FUSE, ETF.com, Morgan Stanley Smith Barney, Ignites, ETFTrends and Company websites Charles Schwab Investment Management, Inc. For Institutional Use Only 12

14 Announced ETP Modifications (Cont d) Guggenheim Announced on February 28, 2018, OER changes in the following ETPs effective immediately Ticker Name Previous OER New OER EWEM Guggenheim MSCI Emerging Markets Equal Country Weight ETF 0.70% 0.71% OEW Guggenheim S&P 100 Equal Weight ETF 0.40% 0.41% EWRE Guggenheim S&P 500 Equal Weight Real Estate ETF 0.40% 0.41% Janus Henderson Announced on February 28, 2018, OER changes in the following ETPs effective immediately Ticker Name Previous OER New OER TRSK Janus Velocity Tail Risk Hedged Large Cap ETF 0.70% 0.71% SPXH Janus Velocity Volatility Hedged Large Cap ETF 0.70% 0.71% Sources: NYSE Arca, BATS, NASDAQ, Strategic Insight, FUSE, ETF.com, Morgan Stanley Smith Barney, Ignites, ETFTrends and Company websites Charles Schwab Investment Management, Inc. For Institutional Use Only 13

15 Announced ETP Modifications (Cont d) Invesco Announced on February 28, 2018, OER changes in the following ETPs effective immediately Ticker Name Previous OER New OER PCEF PowerShares CEF Income Composite Portfolio 2.02% 2.07% DWLV PowerShares DWA Momentum & Low Volatility Rotation Portfolio 0.52% 0.68% DWIN PowerShares DWA Tactical Multi-Asset Income Portfolio 0.69% 0.58% PXH Powershares FTSE RAFI Emerging Markets Portfolio 0.49% 0.50% PAGG PowerShares Global Agriculture Portfolio 0.76% 0.77% PSMG PowerShares Growth Multi-Asset Allocation Portfolio 0.39% 0.36% PIN PowerShares India Portfolio 0.82% 0.79% KBWD PowerShares KBW High Dividend Yield Financial Portfolio 2.99% 2.40% PGX PowerShares Preferred Portfolio 0.50% 0.51% EEMO PowerShares S&P Emerging Markets Momentum Portfolio 0.29% 0.31% IDHQ PowerShares S&P International Developed Quality Portfolio 0.33% 0.29% US Commodity Funds Announced on February 28, 2018, an OER change in the following ETP effective immediately Ticker Name Previous OER New OER USO United States Oil Fund LP 0.76% 0.84% Sources: NYSE Arca, BATS, NASDAQ, Strategic Insight, FUSE, ETF.com, Morgan Stanley Smith Barney, Ignites, ETFTrends and Company websites Charles Schwab Investment Management, Inc. For Institutional Use Only 14

16 Announced ETP Modifications (Cont d) Virtus Announced on February 28, 2018, OER changes in the following ETPs effective immediately Ticker Name Previous OER New OER AMZA InfraCap MLP ETF 1.36% 1.93% CUMB Virtus Cumberland Municipal Bond ETF 0.59% 0.62% NFLT Virtus Newfleet Multi-Sector Bond ETF 0.82% 0.80% Sources: NYSE Arca, BATS, NASDAQ, Strategic Insight, FUSE, ETF.com, Morgan Stanley Smith Barney, Ignites, ETFTrends and Company websites Charles Schwab Investment Management, Inc. For Institutional Use Only 15

17 ETP Closures Credit Suisse Announced on February 6, 2018 the liquidation of the following ETP with the closure date as February 21, Ticker XIV Name VelocityShares Daily Inverse VIX Short-Term ETN WisdomTree Announced on February 20, 2018 the liquidation of the following ETPs with an expected closure date of March 16, 2018 Ticker DXPS DXJR DXJC DXJH DXUS HDRW WUSA WEXP EMSD Name WisdomTree United Kingdom Hedged Equity Fund WisdomTree Japan Hedged Real Estate Fund WisdomTree Japan Hedged Capital Goods Fund WisdomTree Japan Hedged Health Care Fund WisdomTree Global ex-u.s. Hedged Dividend Fund WisdomTree Global ex-u.s. Hedged Real Estate Fund WisdomTree U.S. Domestic Economy Fund WisdomTree U.S. Export and Multinational Fund WisdomTree Strong Dollar Emerging Markets Equity Fund Sources: NYSE Arca, BATS, NASDAQ, Strategic Insight, FUSE, ETF.com, Morgan Stanley Smith Barney, Ignites, ETFTrends and Company websites Charles Schwab Investment Management, Inc. For Institutional Use Only 16

18 New Exemptive Relief Grants Salt Financial Granted exemptive relief to offer index-based ETFs Validea Capital Management Granted exemptive relief to offer index-based ETFs EcuBot LLC Granted exemptive relief to offer transparent, actively-managed ETFs Sources: SEC filings, Strategic Insight, FUSE, ETF.com, Ignites and ETFTrends Charles Schwab Investment Management, Inc. For Institutional Use Only 17

19 Definitions ETPs (exchange-traded products) Exchange-Traded Products include a number of investment products. ETFs (exchangetraded funds) consist of several different structures such as open-end funds, unit investment trusts (UITs), grantor trusts and commodity pools (limited partnerships). Exchange-traded notes (ETNs) are not structurally ETFs but another type of exchangetraded product. As ETFs represent the vast majority of these exchange-traded investment products, the term is often used as a catchall. Here, the label exchange-traded product (ETP) is used as the umbrella under which ETFs and other related investment products, including ETNs, fall. ETMF (exchange-traded managed fund) ETMFs are a new type of open-end fund that combine aspects of both ETFs and mutual funds (MFs). ETMF shares are expected to trade throughout the day on an exchange, but unlike ETFs, trading prices are expected to be linked to the fund s end-of-day net asset value utilizing an approach called NAV-based trading and the current requirement of most ETFs to disclose their holdings daily is eliminated. ETMF providers require agreements with NextShares Solutions LLC, (NextShares), the Eaton Vance subsidiary formed to develop and commercialize NextShares. Charles Schwab Investment Management, Inc. For Institutional Use Only 18