by Deborah Fuhr

LONDON – December 5, 2013 – The combination of US$17.0 billion in net inflows and positive market performance pushed assets in the global ETF/ETP industry to a new record high of US$2.4 trillion at the end of November, 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 US$32.6 billion of net inflows in October and the US$35.7 billion net inflows in September.

According to Deborah Fuhr, Managing Partner at ETFGI:

“Rising levels of uncertainty as to when and how the Federal Reserve will taper its QE scheme has contributed to the weaker inflows into ETFs/ETPs in November”

In November 2013, ETFs/ETPs saw net inflows of US$17.0 billion. Equity ETFs/ETPs gathered the largest net inflows with US$18.2 billion, followed by fixed income ETFs/ETPs with US$1.1 billion, while commodity ETFs/ETPs experienced the largest net outflows with US$1.7 billion.

Year to date (YTD) through end of November 2013, global ETF/ETP assets have risen by 21% based on positive market performance and net inflows of US$220.6 billion, which is in line with the net inflows at this time in 2012.

Equity ETFs/ETPs have gathered the largest net inflows YTD with US$213.5 billion, which is significantly higher than the US$124.4 billion at this point in 2012. Fixed income ETFs/ETPs have been the second most popular asset class, though net inflows of US$22.4 billion YTD are lagging behind the US$61.6 billion gathered YTD in 2012. Commodity ETFs/ETPs have so far experienced net outflows in 10 of the 11 months of 2013, with year to date net outflows reaching US$34.7 billion at the end of November. This is in contrast to net inflows of US$22.4 billion at this point in 2012.

Equities have been the preferred area to allocate assets during 2013 with net inflows of US$213.5 billion. North American/US equity ETFs/ETPs gathered the largest net inflows YTD with US$127.4 billion, followed by developed Asia Pacific/Japan equity ETFs/ETPs with US$35.5 billion, and developed European equity ETFs/ETPs with US$24.7 billion, while emerging market equity ETFs/ETPs have experienced YTD net outflows of US$9.8 billion.

ETF/ETP PROVIDERS

YTD, iShares ranks first based on net inflows of US$57.3 billion. Vanguard is 2nd with US$55.7 billion, WisdomTree is 3rd with US$13.6 billion, PowerShares is 4th with US$13.3 billion and SPDR is 5th with US$11.5 billion.

Active ETFs/ETPs (transparent), which have been receiving a lot of press coverage recently, are still a very small segment of the industry with 126 products holding combined assets of US$20.9 billion, accounting for less than 1% of total ETF/ETP assets invested worldwide. Many existing ETF managers as well as traditional active mutual fund managers have made filings with the SEC hoping to offer non-transparent Active ETFs and ETMFs. The SEC is said to be discussing these proposals which in some cases have been with the SEC for over 5 years.

About The Author

Deborah Fuhr, partner and co-founder of ETFGI, an independent research and consulting firm providing services to investors and the ETF industry. Prior roles Global Head of ETF Research and Implementation Strategy and a Managing Director at BlackRock/BGI for 3 years and Managing Director and head of the Investment Strategies Group for 11 years.