Global ETF inflows lowest for 21 months, finds ETFGI

Mar 12th, 2018 | By | Category: ETF and Index News

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ETFs and ETPs (hereafter ETFs) gathered $12.4 billion globally in net inflows during February, the lowest monthly amount since May 2016 when net inflows were $10.5bn, according to ETF industry consultant ETFGI.

Global ETF net inflows of $12.4bn during February marked a significant turnaround from the $100.6bn collected during January.

The relatively subdued flows mark a sharp turnaround from January when ETFs experienced their highest monthly net inflows on record, pulling in $100.6bn (as reported by BlackRock).

January was a bumper month for ETFs – and something of an outlier – with net inflows more than 45% higher than the previous monthly record of $68.7bn set in September 2008.

The weaker inflows, coupled with an equity market correction, saw total assets invested in ETFs globally shrink by a record $180.1bn during the month.

The decrease of 3.5%, from $5.148 trillion at the end of January 2018, represents the biggest relative fall in assets since January 2016, when assets decreased 4.7% from $2.994tn.

Despite the weaker flows, the global ETF industry’s unbroken run of monthly net inflows continues with February marking the forty-ninth consecutive month of investors adding to total AUM.

Source: ETFGI.

The top 20 ETFs by net new assets have collectively gathered $61.8bn during 2018.

The iShares Core S&P 500 ETF (IVV US) leads the pack with net inflows of $10.9bn, highlighting a broader trend that investors are still favouring low-cost, broad market, plain-vanilla ETFs. IVV provides exposure to the bellwether S&P 500 Index for a management fee of just 0.04% per annum.

Source: ETFGI.

Similarly, the top 10 ETPs by net new assets have collectively gathered $4.4bn YTD.

The ProShares Short VIX Short-Term Futures ETF (SVXY US) has attracted over $1.4bn in net inflows by itself over this period. SVXY essentially provides inverse exposure to the volatility of US equities represented by the VIX index. The fund has proven very popular with investors as volatility traded around record lows through most of 2017 as the US equity market quietly chugged higher. It pulled in $920m in net inflows during January alone. All that changed on 6 February, however, as a rapid correction in the equity market sent the VIX soaring higher off its low base – SVXY lost some 95% of its value during that day alone (See: “ProShares reduces VIX ETFs’ exposures following volatility blow-up”).

Source: ETFGI.

Equity ETFs gathered net inflows of just $1.4bn in February, bringing net inflows for 2018 to $89.1bn. Fixed income ETFs gathered net inflows of $3.2bn in February, growing net inflows for 2018 to $14.7bn.

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