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Global ETF assets declined in December despite big inflows

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ETFs recorded massive inflows of USD70.2 billion in December, though their asset prices were heavily impacted by the collapse of stock markets, according to TrackInsight’s latest Monthly ETF Digest.

TrackInsight writes: “Assets under management in US-domiciled ETFs decreased from USD3,495 billion as of 30 November to USD3,276 billion at the end of December, ie around 10 per cent below the asset threshold recorded at the end of the third quarter of 2018. Such a decline (USD218.5 billion) results from the disappointing performance of the underlying asset classes (USD-269.5 billion) which was partly hidden by the inflows (USD51 billion) posted by the ETF providers in America. Equity ETFs accounted for the bulk of the decrease in assets under management as they lost USD272 billion in value while recording only USD30.8 billion in new net assets. On the other hand, fixed-income and commodity products were spared from the financial turmoil with inflows totalling USD18.9 billion and USD1.33 billion respectively.”
 
“For the EMEA area, assets under management declined by USD36 billion in December finishing the year at USD699.6 billion. The USD3 billion in new inflows have been a meagre silver lining following the USD39 billion loss caused by market performance. In the wake of market turbulences, investors fled to fixed-income products (USD4.2 billion inflows) and commodity products (USD0.9 billion inflows). Therefore EMEA equity ETFs experienced significant redemptions in December (USD2.1 billion), in addition to the overall decrease in assets due to the performance effect (USD-53.6 billion).”
 
“Lastly, the recent market shock did not spare ETFs domiciled in the APAC region. Even with inflows of USD16.2 billion, their assets declined from USD423.3 billion at the end of November to USD412.3 billion one month later. It should be noted that most of the inflows (USD16.2 billion) benefited equity ETFs despite their poor performance resulting in a loss of USD28.3 billion. Fixed-income products suffered from outflows of USD170 million while commodities recorded inflows of USD240 million.”

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