ETFs set to reach record asset levels by year end

Exchange traded funds and exchange traded products are set to reach record levels by year end, according to research and consultancy firm ETFGI.

“We are likely to end 2012 with a record level of assets in ETFs and ETPs, and with a record level of net new assets invested into the products during the year,” according to Deborah Fuhr, managing partner at ETFGI.

In November, $21.3bn of net new money went into ETFs and ETPs, pushing assets to a record level of $1.9trn. Year to date through end of November, ETF and ETP assets listed globally have increased 23.8%, from $1.5trn to $1.9trn.

Assets reached all-time highs of $1.3trn in the US, $359bn in Europe, $78.7bn in Asia Pacific (ex-Japan), $46.9bn in Japan and $11.6bn in Latin America.

ETFGI says $9bn were invested into ETFs and ETPs providing exposure to US equity indices alone, reversing nearly all of the outflows during October. This reflects a greater confidence among investors, now that the uncertainties of the US elections and super storm Sandy are over, and thanks to a sense among investors that a solution to the looming fiscal cliff will be negotiated.

Equity ETFs and ETPs accounted for $127bn of inflows, some $36bn more than all of last year. Products providing exposure to North American equity indices have been the most popular receiving US$62 billion, followed by emerging market equity with US$38 billion and Asia Pacific equity with US$9.6 billion.

Fixed Income ETFs and ETPs have proven to be very popular tools this year with $61bn in net new assets, gathering $16bn more than all of last year. Corporate bond products have gathered the largest net inflows with $24.5bn, followed by high yield with $14bn.

Commodity flows at $22.5bn are $5.5bn above this time last year. Precious metals have gathered the largest net inflows with $19.8bn, while agriculture experienced the largest net outflows with $1.4bn.

Over the past ten years the global compounded annual growth rate of these products has been 30.2%. There are currently 4,726 ETFs and ETPs, with 9,719 listings, assets of $1.9trn, from 208 providers on 56 exchanges.

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