ETFGI: ETF surpasses hedge fund industry

Assets invested in the global ETF/ETP industry have surpassed the assets invested in the hedge fund industry at the end of Q2 as we had forecasted, ETFGI has reported.

According to their analysis, there was $2.971trn invested in the 5,823 ETFs/ETPs listed globally at the end of Q2 2015, assets were down slightly from their record high of $3.015trn (€2.7trn) at the end of May 2015, while assets in the global hedge fund industry, according to a new report published by Hedge Fund Research HFR, reached a new record high of $2.969trn (€2.6trn) invested in 8,497 hedge funds, which is $2bn (€1.8bn) smaller than the assets in the global ETF/ETP industry.

This is a significant achievement for the global ETF/ETP industry, which just celebrated its 25th  anniversary on March 9th while the hedge fund industry has existed for 66 years. Below is a chart which illustrates how the assets in the ETF/ETP industry have been gaining on the assets invested in the hedge fund industry, more notably since the financial crisis in 2008.

In Q1 2015 the performance of the HFRI Fund Weighted Composite Index was 2.3%, which is only 1.3% higher than the 1% return of the S&P 500 Index. Many investors have been disappointed with the performance of hedge funds over the past few years as the HFRI Fund Weighted Composite Index has delivered returns significantly below the returns of the S&P 500 Index, according to S&P Dow Jones.

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