According to ETFGI US$13.5 billion of net new assets (NNA) flowed into global Exchange Traded Funds (ETFs) and Exchange Traded Products (ETPs) in October which is lower than the US$40 billion of net inflows in September 2012. Investors and investments suffered from growing uncertainty in October over the likely outcome of the US presidential election, the impact of the fiscal cliff in the US, the likely impact of superstorm Sandy and the on-going debt concerns in the Eurozone.
US listed ETFs and ETPs which traditionally account for the majority of NNA saw these uncertainties dampen the inflows into ETFs and ETPs listed in the US to just US$2.7 billion or 20% of NNA in October. Globally, ETFs and ETPs providing exposure to North America equities also suffered from these concerns as investors withdrew net outflows of US$10.1 billion.
As the majority of concerns and uncertainties focused on the US, and investments in the US, it did not negatively impact NNA flows in all regions around the world. We saw robust flows into ETFs and ETPs listed in both Europe, which accounted for US$4.6 billion or 34% of total NNA, and in Asia Pacific (ex Japan) which amassed US$4.5 billion or 33.7% of the total. Products listed in Japan, Canada, Middle East and Africa and Latin America accounting for US$1.7 billion.
“The source and composition of the fund flows in October shows that ETFs and ETPs are a product set that are increasingly being embraced by investors around the world and are a very good indicator of how investors are tactically and strategically adjusting their allocations to political, economic and other uncertainties that are impacting the markets” according to Deborah Fuhr, Managing Partner at ETFGI.
At the end of October 2012, the global ETF and ETP industry had 4,694 ETFs and ETPs, with 9,646 listings, assets of US$1.85 trillion, from 203 providers on 56 exchanges. Year-to-date global ETFs and ETPs have gathered US$201.7 billion of net new assets.
Year-to-date through the end of October, equity ETFs and ETPs have gathered the largest net inflows accounting for US$114 billion, followed by fixed income ETFs and ETPs with US$57 billion and commodity ETFs and ETPs capturing US$20 billion.
Equity focused ETFs and ETPs have gathered US$3.2 billion in October and US$114 billion YTD, which is US$23 billion more than the NNA flows they received in all of 2011. In October investors withdrew US$10.1 billion from ETFs and ETPs providing exposure to North American equity indices and invested US$8.8 billion into ETFs and ETPs providing exposure to emerging market equity indices.
Fixed Income ETFs and ETPs received net inflows of US$6.1 billion in October and US$57 billion year to date, which is US$21 billion more than the total net new assets they received in the same period last year. Within fixed income, corporate bond products have gathered the largest net inflows in October with US$3.4 billion, followed by emerging market products with US$1.9 billion.
Commodity products received NNA inflows of US$3.3 billion in October and US$20 billion year to date which is US$5 billion more than full year 2011 NNAs. Precious metals gathered US$2.4 billion in October and US$17.6 billion year to date, followed by broad commodity exposure with US$2.5 billion and US$1.1 billion in energy exposure.
Reviewing the NNA flows for the top 3 ETF and ETP providers globally in October, iShares accumulated US$10.9 billion in NNA and US$61.2 billion year to date which is in excess of their 2011 total of US$53.7 billion. Vanguard was second in the NNA race in October and year to date winning US$3.4 billion and US$46.3 billion respectively. Vanguard’s YTD NNA total of US$46.3 billion is US$10 billion above their full year 2011 NNA total of US$36 billion. SPDR ETFs suffered US$8.4 billion in NNA outflows in October but is still doing well on a year to date basis where they have taken in US$20.8 billion which is nearly the same amount they took in during all of 2011.