Global ETF assets surpass $6-trillion

By The IJ Staff | November 21 2019 03:00PM

Photo: Freepik

Research firm EPFR, a subsidiary of UK-based Informa plc, announced this week that global exchange-traded fund (ETF) assets surpassed the $6-trillion mark in 2019.

From Jan. 1 through Oct. 31, 2019, global ETF assets rose $840-billion, to reach $6-trillion in November 2019. Since the global financial crisis, the company says ETF assets have grown six-fold, jumping from $1-trillion in December 2009 to $3-trillion in March 2016 and $5-trillion in January 2018 before reaching the $6-trillion mark at the start of November 2019.

“Growth in equity ETFs has been considerable when compared to equity mutual funds,” the firm said in a statement released Nov. 20. “Since 2002, EPFR has tracked how equity ETFs have consistently taken away market share from equity mutual funds.”

More favourable taxation in the U.S.

They add that monetary policy from major central banks around the world helped to boost prices in nearly every asset class. In the U.S., where, over $4-trillion of global ETF assets are domiciled, the taxation of ETFs is also more favourable, exerting less of a drag on performance compared to regular funds.

The firm’s research also reveals a surge in relative flows into ETFs with socially responsible or environmental, social and governance mandates. “EPFR research indicates this emerging trend reflects the preferences of a growing cohort of millennial investors,” they write.

Nearly half of the $2.4-triliion that has flowed into the equity ETFs tracked by the firm since 2002 have gone to funds with U.S. mandates. Two thirds of the total AUM in the firm’s tracked ETFs are managed by U.S. domiciled funds with one U.S. fund provider in particular accounting for over one-third of the total assets under management of all ETFs tracked by EPFR Global.

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