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POST-PANDEMIC BOOST TO U.S. ETF MARKET FADES (0921 EDT/1321 GMT)

The number of U.S. new ETF product launches is slowing after a surge post-pandemic when adoption increased following the investment vehicle's successful survival in COVID-19 liquidity crunch, according to Citi Research.

Overall, the U.S.-listed ETF ecosystem has topped $7 trillion in assets across nearly 3,200 products, Citi said.

Over 300 products have launched this year, on a path to hit roughly 400 new products in 2023, slightly below recent annual figures, while product launches continue to be geared towards equities, strategist Scott Chronert wrote in a note.

On the flip side, nearly 150 U.S.-listed ETFs have closed this year, excluding fixed income products with defined maturities.

"As equity ETF launches seem set to plateau or decelerate this year, fixed income product additions should continue to accelerate," Chronert said.

There are areas in fixed income that years ago did not have sufficient market structure to support the underlying being wrapped into ETFs, Chronert explains.

Evolution in areas in corporate credit trading have permeated asset classes like Bank Loans, CLOs, and some areas in the Securitized market, which is likely to incite issuers to launch more ETFs in these categories, he added.

Thematic Equity ETFs have led category launches over the past two years as asset managers - both active and passive - are increasingly finding new ways to dissect stock markets, according to Citi.

Meanwhile, the trend in broad equity ESG product launches appears to be fading after strong growth in past two years.

Broadly, Citi notes the industry still remains rather concentrated. The top five issuers by assets control over 85% of the total U.S.-listed ETF assets under management as inflows into low-cost, first movers in the ETF space continue despite market volatility.

Some other interesting facts about U.S. ETFs from Citi:

- The percentage of ETFs earning full management fees steps up between 4-5 years

- If an ETF is not self-sustaining by then, they are usually closed. The average age of ETFs closed over the past 10 years is 4.5 years

- Actively managed ETFs have gone from 20-40% of launches pre-2020, to over 60% since then.

(Medha Singh)

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BACK TO REALITY (0851 ET/ 1251 GMT)

Stocks were pointing to a slightly lower open on Thursday, with stock index futures modestly adding to declines while Treasury yields ticked higher after a reading on the labor market indicated it remained on solid footing.

Weekly initial jobless claims edged up to 207,000 from 205,000 in the prior week but were below the 210,000 estimate, while the four-week average slipped to 208,750 from the prior revised 211,250.

The data comes ahead of Friday's payrolls report and runs counter to Wednesday's soft ADP National Employment Report which helped fuel the prior day's rally in stocks as bond yields eased.

Earlier on Thursday, a report from outplacement firm Challenger, Gray & Christmas showed U.S. employers scaled back their planned job cuts in September, especially in the warehousing sector, but workforce reduction intentions were higher on a year-to-date basis amid continued cuts in the technology and retail industries.

Below is your premarket snapshot:

(Chuck Mikolajczak)

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