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ETFs, ETPs Record Robust Asset Flows in First Half

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ETFGI, a research and consultancy firm, reported this week that assets invested in exchange-traded funds and products listed globally and in the U.S. set new records in the first half — $4.2 trillion and $3 trillion.

The record setting extended to assets invested in smart beta equity funds, according to ETFGI.

(Related: Low Fees Drive Flows Into Active Funds: Broadridge)

“Equity markets have performed well in the first half of 2017: The S&P 500 gained 9.34%, international equity markets outside the US were up 14.27% and emerging markets were up 16.69%,” ETFGI managing partner Deborah Fuhr said in a statement. 

“Political risks remain a focus for investors — the ability of the Trump administration to move forward on policy goals and hearings on Capitol Hill, Brexit negotiations and North Korea is still an area of concern.”

At the end of June, the U.S. industry had 2,041 funds and products from 113 providers listed on three exchanges. These products gathered a record $46.6 billion net inflows in June, the 16th consecutive month of positive net new asset flows.

Year to date, net ETF/ETP inflows stand at $247.4 billion, significantly above the $66.3 billion of net new assets at the same time last year:

  • Equity: $174.2 billion, versus $2.5 billion net outflows in 1H 2016
  • Fixed income: $61.9 billion, versus $44.6 billion net inflows
  • Commodity: $433 million, versus $17.9 billion net inflows

iShares had the largest net inflows for the year to June with $118.8 billion, followed by Vanguard with $77.5 billion and Schwab with $13.4 billion.

Global Flows

At the end of June, the global ETF/ETP industry comprised 6,965 vehicles with 13,125 listings from 328 providers listed on 70 exchanges in 56 countries.

June net inflows set a record of $63.6 billion, bringing year-to-date inflows to $347.7 billion, compared with net inflows of just $123.6 billion in the first half of 2016.

The European industry had 2,286 funds and products, with 7,227 listings, assets of $686 billion, from 60 providers listed on 27 exchanges in 22 countries.

Europe-listed products took in $10.6 billion of new assets in June, marking the 34th month of consecutive net inflows. Year-to-date net inflows stand at a record $63.9 billion, significantly above $22.6 billion in last year’s first half and above the $55.7 billion recorded in all of 2016.

Canada’s 515 listed ETFs had assets of US$101 billion after gathering net inflows of $2.3 billion in June and a record $11.5 billion year to date, significantly greater than the $8.3 billion in net inflows at this point last year.

At the end of June, Japan’s 188 listed funds and products had $220 billion in assets, with $2.2 billion of net inflows recorded that month. Year to date, net inflows were well ahead of those in the 2016 first half, $28.6 billion versus $16.5 billion.

Smart Beta Equity Funds

ETFGI reported that smart beta equity ETF/ETP assets increased from $515 billion in January to a new record of $592 billion in June, and had a five-year compound annual growth rate of 31.9%.

At mid-year, there were 1,255 smart beta equity funds and products with 2,159 listings from 153 providers on 39 exchanges in 32 countries.

Of these, 617 ETFs/ETPs domiciled and listed in the U.S. held 89% of smart beta assets, and 76% of these assets were invested in vehicles that provide exposure to the U.S. market. 

Year to date, iShares gathered the largest smart beta ETF/ETP net inflows with $13.2 billion, followed by Vanguard with $7.8 billion and Schwab with $4.5 billion.

In the first half, products tracking S&P Dow Jones smart beta benchmarks had the largest net ETF/ETP inflows with $11.6 billion, followed by CRSP with $6.8 billion and MSCI with $6.3 billion.

Active ETFs/ETPs

According to ETFGI, the global active ETF/ETP industry had 364 funds and products at the end of June, with 432 listings from 78 providers listed on 18 exchanges in 14 countries.

Active ETF/ETP assets increased from $43.5 billion to a new record of $56.7 billion during the first half.  

Nearly 66% of the assets in active ETFs/ETPs were in the 190 active products domiciled and listed in the U.S., 72.9% of which assets were in the 116 active fixed income products.

Active funds and products recorded their 30th consecutive month of net inflows in June, $2.7 billion, for year-to-date net inflows of $13 billion.

First Trust pulled in the largest net ETF/ETP inflows in the first half with $2.6 billion, followed by Pimco’s $1.3 billion and SPDR ETFs with $1.1 billion.

— Check out ETFs: Why They Keep Growing on Advisors on ThinkAdvisor.


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