ETFs register first outflows in over two years

Jul 5th, 2013 | By | Category: ETF and Index News

Exchange-traded funds (ETFs) and exchange-traded products (ETPs) have registered their first net outflows in over two years, with almost $4 billion being pulled out of the products globally in June 2013, according to preliminary figures from ETFGI, a London-based consultancy.

ETFs register first outflows in over two years

Almost $4 billion was pulled out of ETF and ETPs in June, according to ETFGI.

Year to date, however, assets in ETFs and ETPs have increased by 4.9% and remain close to the all-time high reached at the end of May 2013. Net inflows for the first half of the year were $103.9 billion.

Reflecting the volatility in markets, average daily trading volumes in June were $92.2 billion, an increase of 31.1% from May and the highest level since October 2011.

Deborah Fuhr, Founder and Managing Partner at ETFGI, said: “Market uncertainty surrounding the future of QE programmes and volatility in the markets caused investors to withdraw $3.98 billion from ETFs and ETPs in June.”

Fixed income ETFs/ETPs experienced the largest net outflows during the month with $7.1 billion, followed by commodity ETFs/ETPs with $3.8 billion. Bucking the trend were equity ETFs/ETPs, which gathered net inflows of $4.8 billion.

Within equities, products linked to North American equity indices accumulated the largest net inflows with $6.9 billion, and then developed European equity indices with $3 billion, while ETFs/ETPs linked to emerging market equity indices experienced net outflows of $4.9 billion.

In the bond space, inflation ETFs/ETPs, such as those tracking index-linked gilts or US TIPS, experienced the largest net outflows with $2.1 billion, followed by high yield with $2 billion, and emerging market debt with $1.8 billion. Straight government bond ETFs/ETPs gathered net inflows of $1.1 billion.

Precious metals accounted for the vast majority of commodity ETF/ETP outflows, with $3.2 billion pulled by investors. Most of this came out of gold-based products such as the SPDR Gold Shares ETF (GLD).

In terms of individual provider performance, the results were mixed. Vanguard fared very strongly and was the only one of the big five to receive net inflows in June. It has now gathered $28.9 billion in net inflows year to date and ranks third overall in ETF assets under management.

Top-ranking iShares, part of asset management titan BlackRock, fared less well with net outflows of $7.9 billion in June. Nevertheless, the firm has still managed to gather net inflows of $23 billion year to date. SPDR ETFs, part of State Street Global Advisors, ranks second in terms of assets and had net outflows of $2.4 billion in June. It is down $6 billion year to date.

Powershares, part of the Invesco group, ranks fourth in ETF assets and had net out flows of $586 million in June. Year to date, though, it has enjoyed net inflows of $7.16 billion, a large proportion of which has gone into the firm’s smart beta products.

Deutsche Asset & Wealth Management’s db X trackers platform, fifth-ranking in terms of assets, had net outflows of $751 million in June, but remains just ahead for the year with net inflows of $9 million.

In terms of index providers, S&P Dow Jones has the largest amount of ETF and ETP assets tracking its benchmarks with $563 billion, reflecting 27.5% market share. A large proportion of these assets are linked to the blue-chip S&P 500 Index – most notably SPDR’s giant SPY fund. MSCI is second with $319 billion and 15.6% market share, followed by Barclays, the leader in the fixed income space, with $188 billion and 9.2% market share.

Globally, there are now 4,849 ETFs and ETPs, with 9,878 listings, from 209 providers listed on 56 exchanges.

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