Global ETF Assets Rise To A Record $2.4 Trillion


Assets in global ETF / ETP industry touched a record high of $2.4 trillion aided by strong net inflows and positive market performance.

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Global ETF Assets Rise To A Record $2.4 Trillion

According to preliminary findings from ETFGI’s November 2013 Global ETF and ETP industry insights report, net inflows into global ETFs / ETPs in November were weaker than the $32.6 billion net inflows witnessed in October and the $35.7 billion net inflows clocked in September.

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Equity ETFs/ ETPs witnessed largest net inflows

For the year-to-date through end of November 2013, global ETF / ETP assets have shot up by 21% on the back of positive market performance and net inflows of $220.6 billion. This is in line with the net inflows at this time in last year. Equity ETFs/ ETPs have witnessed the largest net inflows YTD with $213.5 billion, which is considerably higher than the $124.4 billion clocked at this point last year. Fixed income ETFs /ETPs take credit for the second most popular asset class as they witnessed net inflows of $22.4 billion YTD, though the net inflows are lagging behind the $61.6 billion gathered YTD in 2012. However, commodity ETFs / ETPs have so far this year clocked net outflows in 10 of the 11 months of 2013. The commodity ETFs / ETPs witnessed year-to-date net outflows of $34.7 billion at the end of November 2013 against $22.4 billion of net inflows clocked at this point last year. As reported earlier, 2013 has been another significant year for the ETF industry. With 134 new products launched this year, the total number of products now stands at 1,531. This year has been great for most equity ETFs thanks mainly to the Fed’s easy money policies.

Also see: 5 Best Performing Active ETFs

Global ETF: North America clocked major inflows

Turning focus on the equity flows, the ETFGI’s report points out that equities have been the preferred area to allocate assets during 2013, clocking net inflows of $213.5 billion. North American / US equity ETFs / ETPs witnessed the largest net inflows YTD with $127.4 billion. Developed Asia Pacific / Japan equity ETFs / ETPs followed second with $35.5 billion net inflows while developed European equity ETFs/ ETPs recorded $24.7 billion net inflows. However, emerging market equity ETFs / ETPs have experienced YTD net outflows of $9.8 billion.

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iShares top provider

In terms of net inflows, YTD iShares ranks first as it clocked net inflows of $57.3 billion, closely followed by Vanguard with $55.7 billion. WisdomTree, PowerShares and SPDR occupy the next three positions with $13.6 billion, $13.3 billion and $11.5 billion net inflows. As pointed out earlier, actively managed ETFs are doing quite well this year. This segment of the ETF market is still in the initial stages of development and is often overlooked by investors due to its lower liquidity and higher costs compared with passive funds. The ETFGI’s report points out that active ETFs / ETPs (transparent) are still a very small segment of the industry with 126 products holding combined assets of $20.9 billion, accounting for less than 1% of total ETF/ ETP assets invested worldwide.

Also see: WisdomTree Doubles Down on Hedged Japan ETF Lineup

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Mani is a Senior Financial Consultant. He has worked in Senior Management role in large banking, financial and information technology organizations. He has provided solutions for major banking and securities firms across the globe in the area of retail, corporate and investment banking. He holds MBA (Finance) and Professional Management Accounting Qualifications. His hobbies are tracking global financial developments and watching sports
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