Economics

Global Smart Beta ETFs And ETPs Gathered $658.35B In 2017

ETFGI reports that assets invested in Smart Beta ETFs and ETPs listed globally increased by 32.3% during 2017 to reach a new high of US$658.35 Bn

[REITs]

LONDON — January 26, 2018 — ETFGI, a leading independent research and consultancy firm on trends in the global ETF/ETP ecosystem, reported today that assets invested in Smart Beta ETFs and ETPs listed globally increased by 32.3% during 2017 to reach a new high of US$658.35 Bn at the end of December. (All dollar values in USD unless otherwise noted.)

Highlights

  • Assets invested in Smart Beta ETFs/ETPs listed globally increased by a record $ 160.61 billion during the year, to reach a new high of $658.35 billion
  • Year-to-date, through end of December 2017, Smart Beta ETFs and ETPs listed globally saw net inflows of $71.75 Bn.
  • Assets in market cap ETFs increased by 40.3% in 2017 which is significantly more than the 32.3% increase in Smart Beta assets.

According to ETFGI’s December 2017 Global Smart Beta ETF and ETP industry insights report, an annual paid-for research subscription service, assets invested in Smart Beta ETFs/ETPs listed globally grew by a record US$160.61 Bn during 2017, almost double the previous record of US$87.41 Bn set in 2016. The increase of 32.3%, from US$497.74 Bn at the end of 2016, also represents the greatest growth in assets since 2009 when markets recovered following the 2008 financial crisis.

Global Smart Beta ETFs And ETPs

This record was achieved on the eve of another milestone for the ETF industry: the 25th anniversary of the listing of the first ETF in the US, the venerable SPDR S&P 500 ETF (SPY US), on 22nd January 1993. At the end of 2017, SPY on its own accounted for assets of US$271.39 Bn.

December 2017 marked the 23rd consecutive month of net inflows into Smart Beta ETFs/ETPs listed globally, with US$8.45 Bn gathered during the month. During 2017 Smart Beta ETFs/ETPs listed globally saw net inflows of US$71.75 Bn; 33.2% more than net inflows for 2016.

The majority of these flows can be attributed to the top 20 Smart Beta ETFs by net new assets, which collectively gathered US$30.92 Bn during 2017. The Vanguard Value ETF (VTV US) on its own accounted for net inflows of US$5.08 Bn.

Top 20 Smart Beta ETFs by net new assets: Global

Name Ticker Assets
(US$ Mn)
Dec-17
ADV
(US$ Mn)
Dec-17
NNA
(US$ Mn)
YTD 2017
Vanguard Value ETF VTV US 36,532 128.6 5,075
iShares MSCI USA Momentum Factor ETF MTUM US 5,427 39.6 3,341
Vanguard Growth ETF VUG US 31,403 89.7 2,179
iShares MSCI USA Minimum Volatility ETF USMV US 15,076 55.1 1,539
Vanguard Small-Cap Value ETF VBR US 12,639 35.5 1,463
Schwab Fundamental US Large Company Index ETF FNDX US 3,761 9.5 1,462
Schwab Fundamental International Large Company Index ETF FNDF US 3,463 9.9 1,365
iShares MSCI EAFE Minimum Volatility ETF EFAV US 8,364 40.0 1,327
iShares Core Dividend Growth ETF DGRO US 2,653 13.7 1,284
iShares MSCI EAFE Value ETF EFV US 6,401 31.7 1,278
Schwab US Dividend Equity ETF SCHD US 7,131 29.4 1,223
iShares Automation& Robotics UCITS ETF RBTX LN 1,484 18.0 1,171
Guggenheim S&P 500 Equal Weight ETF RSP US 14,993 43.8 1,115
iShares International Select Dividend ETF IDV US 4,888 14.8 1,108
Schwab Fundamental US Small Company Index ETF FNDA US 2,672 6.9 1,096
iShares Edge MSCI Europe Value Factor UCITS ETF IEFV LN 1,762 5.4 1,040
iShares Edge MSCI USA Value Factor UCITS ETF IUVL LN 1,320 4.9 985
Vanguard Mid-Cap Value ETF VOE US 8,349 23.0 962
First Trust Value Line Dividend Index Fund FVD US 4,195 10.2 953
First Trust Nasdaq Bank ETF FTXO US 1,212 1.9 953

 Similarly, the top 10 ETPs by net new assets collectively gathered US$661.56 Mn year-to-date during 2017.
Top 10 Smart Beta ETPs by net new assets: Global

Name Ticker Assets
(US$ Mn)
Dec-17
ADV
(US$ Mn)
Dec-17
NNA
(US$ Mn)
YTD 2017
FI Enhanced Global High Yield ETN FIHD US 1,134 3.3              357
Psagot Sal Europe WisdomTree Export Oriented (NTR) ILS (40a) PSGT304 IT 113 0.3             101
TACHLIT S&P AERO & DEFENSE TCSP145 IT 53 0.2                44
Barclays ETN+ Shiller CAPE ETN CAPE US 95 0.3                39
Psagot Sal Japan WisdomTree (NTR) ILS (40a) PSGT306 IT 233 0.4                25
ETRACS Monthly Pay 2xLeveraged U.S. Small Cap High Dividend ETN SMHD US 44 0.5                21
Harel Sal S&P 500 Low Volatility HRSPL82 IT 79 0.1                20
NEXT NOTES Japan Equity High Beta Select 30 Net Total Return ETN 2068 JP 23 0.1                19
NEXT NOTES Japan Equity Low Beta Select 50 Net Total Return ETN 2069 JP 21 0.2                19
NEXT NOTES AI Companies 70 Net Total Return ETN 2067 JP 32 0.9              18

Value Factor ETFs/ETPs listed globally saw net inflows of US$2.63 Bn in December, growing net inflows for 2017 to US$16.66 Bn. Multi Factor ETFs and ETPs gathered net inflows of US$1.41 Bn in December, bringing net inflows for 2017 to US$12.85 Bn.

To conclude, investors have tended to invest in lower cost and Value Factor ETFs in 2017 with the Vanguard Value ETF (VTV US) accumulating net inflows of US$1.40 Bn and a TER of 6bp.
Please contact deborah.fuhr@etfgi.com if you would like to discuss the cost to subscribe to any of ETFGI’s  research or consulting services.