Franklin Templeton’s David Mann reflects on the year in ETFs so far

David Mann, Head of Capital Markets, Global ETFs at Franklin Templeton has done the brave thing and taken a look back at his predictions from the beginning of the year and also written his outlook for the remainder of 2021.

The top line thoughts from his recent blog, include a note that back at the beginning of the year he believed that ETFs that hold international equities will account for over 50 per cent of 2021 equity inflows. 

“Not surprisingly, many of the largest low-cost ETFs that hold US equities are at the top of the 2021 flows leaderboard,” Mann writes. “However, ETFs that hold international equities are more than holding their own. For 2021, ~40 per cent of ETF equity inflows have been into funds that hold international equities, up 10 per cent from 2020.”

Given all the varying global perspectives on currencies, pandemic management, monetary policy, etc, Mann believes that we will get to 50 per cent at the end of the year.
Mann predicted that even more smaller funds would make an even bigger AUM leap over 2021, forecasting that 15 funds that started the year with less than USD200 million of assets under management (AUM) would reach the USD1 billion milestone by the end of 2021. Thus far in 2021, 10 of those funds are on pace to finish the year over USD1 billion, with three of them already achieving that goal.

Mann also predicted that active ETF assets would reach USD250 billion. Total active ETF AUM is currently ~USD263 billion, representing ~5 per cent of total ETF AUM in the United States, he writes. “Active ETFs had USD55 billion of inflows in 2020, representing 11 per cent of the year’s inflows. Active ETFs have already had USD55 billion of inflows in the first six months of 2021, representing 12 per cent of 2021 inflows. Goal achieved and we are only six months into the year! The total active ETF AUM is up almost USD100 billion since the end of 2020 and USD350 billion of active ETF assets by the end of the year is in play.”