ETFs Heading for Trillion-Dollar Mark

Assets invested globally in exchange traded funds have reached a record high of $862bn (£514bn) on the back of the partial recovery in stock markets and the continuing strong demand for passive investment, according to data from Barclays Global Investors. Net new inflows account for about half of the rebound in ETF assets, with the remainder the result of the rising value of existing assets.

ETFs investing in the stock markets of Brazil, China, South Korea and Taiwan have shown the fastest growth this year. BGI says there are now 257 emerging market equity ETFs with total assets of $130bn, up from just $71bn in January. This year's 21.2 per cent rise in global ETF assets comfortably outstrips the 13.5 per cent rise in the MSCI World equity index in dollar terms.

As of August 1st, there were 751 ETFs in the US with assets of $640BN managed by 27 ETF managers, according to the ETF update by State Street Global Advisors. ETF industry assets rose $47.4BN for the month, or 8.0%. Eleven of the twelve categories gained assets. The International category rose the most in absolute and percentage terms, up $16.6BN, or 12.6%. Inverse/Leverage, down $1.9BN, was the only category to lose assets. The top three US ETFs in terms of assets were: the SPDR S&P 500 (SPY), SPDR Gold Shares (GLD), and iShares MSCI EAFE (EFA).

Nine of the ten sectors gained assets, with only Consumer Staples declining. Assets are up 17.2% overall with Materials gaining the most year-to-date, up 69.2%. The top three managers in the US ETF marketplace were: Barclays Global Investors, State Street Global Advisors, and Vanguard. Collectively, they accounted for approximately 83.9% of the US-listed ETF market.