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October net new asset flows into exchange-traded funds (ETFs) and exchange-traded products (ETPs) globally were $13.5 billion, down from the previous month’s total of $40 billion in September, according to ETFGI, an ETF consultancy.
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 effect of superstorm Sandy and the ongoing 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 $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 $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 $4.6 billion or 34% of total NNA, and in Asia Pacific (ex Japan) which amassed $4.5 billion or 33.7% of the total. Products listed in Japan, Canada, Middle East and Africa and Latin America accounting for $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 $1.85 trillion, from 203 providers on 56 exchanges. Year-to-date global ETFs and ETPs have gathered $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 $114 billion, followed by fixed income ETFs and ETPs with $57 billion and commodity ETFs and ETPs capturing $20 billion.
Equity focused ETFs and ETPs have gathered $3.2 billion in October and $114 billion YTD, which is $23 billion more than the NNA flows they received in all of 2011. In October investors withdrew $10.1 billion from ETFs and ETPs providing exposure to North American equity indices and invested $8.8 billion into ETFs and ETPs providing exposure to emerging market equity indices.
Fixed Income ETFs and ETPs received net inflows of $6.1 billion in October and $57 billion year to date, which is $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 $3.4 billion, followed by emerging market products with $1.9 billion.
Commodity products received NNA inflows of $3.3 billion in October and $20 billion year to date which is $5 billion more than full year 2011 NNAs. Precious metals gathered $2.4 billion in October and $17.6 billion year to date, followed by broad commodity exposure with $2.5 billion and $1.1 billion in energy exposure.
Reviewing the NNA flows for the top 3 ETF and ETP providers globally in October, iShares accumulated $10.9 billion in NNA and $61.2 billion year to date which is in excess of their 2011 total of $53.7 billion. Vanguard was second in the NNA race in October and year to date winning $3.4 billion and $46.3 billion respectively. Vanguard’s YTD NNA total of $46.3 billion is $10 billion above their full year 2011 NNA total of $36 billion. SPDR ETFs suffered $8.4 billion in NNA outflows in October but is still doing well on a year to date basis where they have taken in $20.8 billion which is nearly the same amount they took in during all of 2011.