The global ETF industry broke the USD9 trillion assets under management barrier over July, according to the latest data from Trackinsight.
From January 1st – July 31st, 2021 ETFs gathered in excess of USD700 billion of new flows, the firm says, bringing the total assets under management to USD9.05 trillion. In the same period 376 ETFs have been launched bringing the total universe to 7,273 ETFs.
Trackinsight writes that all regions have seen significant growth in terms of both assets and flows this year. European-listed ETFs have risen to USD1.5 trillion in assets, propelled by USD128 billion of flows between January and July, while ETFs listed on North American exchanges have seen USD548 billion of new flows over the same period, bringing their total assets to a record USD6.8 trillion. The far smaller Asia-Pacific market makes up the balance, with USD701 billion in assets and a modest USD24 billion of flows.
ETFs which follow a sustainable investment approach or theme continue to reach new records with USD325 billion of assets and USD100 billion of flows year-to-date, Trackinsight writes. This already exceeds the total flows into ESG ETFs in 2020 of USD88.5 billion. The number of ESG ETFs listed worldwide has grown explosively in 2021 with 174 new ETFs being launched between January and August as issuers rush to capture this asset windfall.
In contrast, flows into Active ETFs have fallen dramatically with July being the worst month this year for new flows – only USD3.7 billion of assets were added to active strategies and weakening performance has seen assets fall slightly from their previous high of USD353 billion to USD352 billion, Trackinsight says. 127 actively-managed ETFs have been brought to market this year as many traditional fund managers launch ETF offerings or reprofile their existing funds as ETFs.
Five of the top 10 performing ETFs of the year focus on the energy sector which has witnessed sharp price rises for natural gas and other fossil fuels. The First Trust ISE-Revere Natural Gas Index Fund leads its peers, rising 61.4 per cent Year-to-Date.
Trackinsight writes that as economies unlock from the most drastic COVID restrictions, pent-up consumer demand is expected to pop. ETFs that focus on the growth in the retail sector have also seen strong performance – The SPDR S&P Retail ETF has risen 48.7 per cent so far this year but has been left in the dust by the Breakwave Dry Bulk Shipping ETF that has risen USD228.7 per cent Year-to-Date. This ETF tracks the cost of shipping dry goods – a cost that has risen dramatically on the basis of over-capacity ports and stretched availability of shipping containers.