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.
“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” according to Deborah Fuhr, Managing Partner at ETFGI.
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.
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.
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*November data on assets and flows for the ETNs listed in Israel has not yet been released.
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ETFs are typically open-ended, index-based funds, with active ETFs accounting for less than 1% market share. They can be bought and sold like ordinary shares on a stock exchange and offer broad exposure across developed, emerging and frontier markets, equities, fixed income and commodities. ETFs are used widely by institutional investors and increasingly by financial advisors and retail investors to:
- equitize cash
- implement diversified exposure to a market
- comprise a core or satellite investment
- be a long term strategic investment
- implement tactical adjustments to portfolios
- use as building blocks to create entire portfolios
- allow investors to hedge the market
- use as an alternative to futures and other derivative products
Exchange Traded Products (ETPs) are products that have similarities to ETFs in the way they trade and settle but do not use an open-end fund structure. The use of other structures including unsecured debt, grantor trusts, partnerships, and commodity pools by ETPs can, in addition to a significantly different risk profile, create different tax and regulatory implications for investors when compared to ETFs, which are funds.
Established by industry expert Deborah Fuhr and partners, ETFGI is a wholly independent research and consultancy firm providing research and services to firm such as the leading global institutional and professional investors, the global exchange traded fund and exchange traded product industry, its Regulators and its advisers. The partners leverage over 30 years of extensive industry experience, unparalleled industry contacts and rigorous analysis to deliver proprietary research on the global ETF and ETP industry.
ETFGI has just published a new report “Institutional Users of ETFs and ETPs 2012” which examines and profiles the number and types of ETFs and ETPs being used by institutional investors globally from 2005 through 2012.
An ETFGI annual paid subscription service provides:
1) the monthly ETFGI ETF and ETP Industry Insight reports, providing a detailed analysis of the global ETF and ETP industry, analysing net new asset flows into asset classes, products and managers, index provider rankings, broker rankings and new product launches, as well as numerous other metrics;
2) a directory of ETFs and ETPs; and
3) access to web tools on the www.etfgi.com website, for a better understanding of industry, product, regulatory and company specific data points. Our website is particularly useful for institutional and professional investors interested in using and comparing all products in the global ETF/ETP industry. There were 5,071 ETFs/ETPs, with 10,146 listings, from 215 providers on 59 exchanges at the end of November 2013.
ETFGI is proud to announce that Deborah Fuhr has been included in the WealthManagement.com “Ten to Watch in 2014” list. Click here to read the full article. In October we won the “Best ETF Research” award in the recent ETF Risk survey, and Financial News has named Deborah Fuhr as one of the Top 100 influential women in Finance 2014, a distinguished list of the most influential women in European Finance.