Global assets invested in exchange-traded funds and exchange-traded products hit an all-time high of USD1.95trn at the end of 2012.
ETF and ETP assets have increased by 27.6 per cent from USD1.53trn to USD1.95trn during 2012, according to figures from ETFGI’s monthly global ETF and ETP industry insights.
The 10 year compounded annual growth rate (CAGR) of global ETF and ETP assets at the end of 2012 was 29.6 per cent. There are currently 4,731 ETFs and ETPs with 9,710 listings, assets of USD1.95trn, from 208 providers on 56 exchanges.
iShares is the largest ETF/ETP provider in terms of assets with USD760bn, reflecting 39.0 per cent market share; SPDR ETFs is second with USD337bn and 17.3 per cent market share, followed by Vanguard with USD246bn and 12.6 per cent market share. These top three ETF/ETP providers, out of 208, account for USD1.34bn or 68.9 per cent of global ETF/ETP assets, while the remaining 205 providers each have less than four per cent market share.
The top three providers of ETFs/ETPs accounted for USD179.5bn, or 67.6 per cent, of all net new assets gathered in 2012. iShares gathered the largest net new ETF and ETP inflows in 2012 with USD87bn, followed by Vanguard with USD54.2bn and SPDR ETFs with USD38.3bn net inflows. All three gathered significantly more net new assets in 2012 than in 2011.
At USD265.3bn, 2012 net inflows into ETFs and ETPs listed globally represented an increase of 55.9 per cent on the USD170.1bn net inflows gathered during 2011 but fell USD7bn short of breaking the record level of net new assets set in 2008. Equity ETFs and ETPs gathered the largest net inflows, accounting for USD167.3bn, followed by fixed income ETFs and ETPs with USD62.9bn and commodity ETFs and ETPs capturing USD23.1bn. Overall, USD37.8bn of net new money went into ETFs and ETPs in the month of December.
“The uncertain and challenging market conditions investors have faced during 2012 and over the past few years, combined with the difficulty in finding active managers that consistently deliver alpha, have caused more institutional investors, financial advisors and retail investors to embrace the use of ETFs and ETPs for strategic and tactical asset allocations. ETFs provide greater transparency in relation to costs, portfolio holdings, price, liquidity, product structure, risk and return compared to many other investment products and mutual funds,” says Deborah Fuhr, managing partner at ETFGI.
Equity focused ETFs and ETPs have gathered USD167.3bn, an increase of 84.5 per cent, or USD76.6bn, on 2011 net new assets. Products providing exposure to US/North American equities have been the most popular receiving USD78.3bn, followed by emerging market equities with USD54.3bn.
Fixed income ETFs and ETPs have proven to be popular tools this year with USD62.9bn in net new assets, an increase of USD17.5bn, or 38.5 per cent, on 2011 levels. Corporate bond products have gathered the largest net inflows with USD24.7bn, followed by high yield with USD14.7bn.
Commodity flows at USD23.1bn are 52.4 per cent higher than 2011 net inflows of USD15.1bn. Precious metals have been the most popular gathering USD20.3bn, while agriculture experienced the largest net outflows with USD1.5bn.
Indices and their methodology are a key factor in selecting and using ETFs and ETPs and there are over 100 firms providing indices. The top three index providers account for 37.4 per cent (1,770) of all products with assets of USD1.1trn, or 54.8 per cent, of all assets.
S&P Dow Jones is the leading index provider for ETFs and ETPs in terms of both number of products and the amount of assets tracking its benchmarks, with 1,103 products holding a combined total of USD481.9bn in assets and collectively capturing USD59.9bn, or 22.6 per cent, of 2012 net new assets. MSCI ranks second with 572 ETFs and ETPs tracking its indices, holding USD405.4bn in assets and gathering USD56.9bn of net new assets. Barclays Capital ranks third with USD180.7bn or 9.3 per cent of the assets in 185 products, reflecting the growth in the use of ETFs and ETPs for fixed income exposure.
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