Assets in smart beta ETFs reach new high, but lag plain beta

Jan 25th, 2018 | By | Category: ETF and Index News

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Assets invested in smart beta exchange-traded funds and exchange-traded products (“ETFs”) listed globally increased by 32.3% in 2017, according to research from ETFGI.

Assets in smart beta ETFs reach new high, but lag plain beta

Assets invested in smart beta ETFs reached new highs in 2017, but growth lagged behind plain beta ETFs.

Assets invested in such products were worth $658.4bn as of 2017 year-end, having increased by $160.6bn over the year.

This is almost double the previous growth record of $87.4bn set in 2016.

December 2017 was the twenty-third consecutive month of net inflows into smart beta ETFs, rising $8.5bn in the month alone.

The top 20 smart beta ETFs by net new assets collectively gained $30.9bn over 2017, with the Vanguard Value ETF (VTV US) accounting for $5.1bn.

While the growth in assets under management in smart beta ETFs over the past year was considerable, the genre actually lagged other product segments; market-capitalisation-weighted (or beta) ETFs grew by 40.3% in 2017 and active ETFs by 48.8%.

On a five-year compound annual growth rate, however, smart beta ETFs remain ahead of plain beta ETFs.

Value factor ETFs listed globally saw net inflows of $2.6bn in December alone, growing net inflows for 2017 to $16.7bn. Multi-factor ETFs gathered net inflows of $1.4bn in December, bringing net inflows for 2017 to $12.9bn.

Overall, investors tended to buy lower cost and value factor ETFs.

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