Forget about all that equity market uncertainty, the exchange traded funds market seems to be saying. The global value of exchange traded products (consisting of ETFs, exchange traded commodities and exchange traded notes) has leapfrogged the previous expectations of a $5 trillion valuation by 2020 to reach a new all-time high of $5.15 trillion in January 2018.
That’s according to data from data provider ETFGI, which reported on 9th February that global holdings had soared in January by a record 6.47%, or $313 billion, from a previous record of $4.84 trillion in December 2017. Net inflows of $106 billion (also an all-time record) were 68.6% higher than a year previously, ETFGI reported.
And, as expected, the bulk of the new money was happening in equities. Assets in Equity ETFs/ETPs increased by 7.49% in January, ETFGI said, which significantly outpaced the 1.73% increase recorded in Fixed Income ETFs/ETPs during the same period.
More than half of the equity inflows went to the world’s top 20 ETFs by net new assets, which collectively gathered $62.6 billion in January 2018. The SPDR S&P 500 ETF Trust (SPY US), which was celebrating the 25th anniversary of its original 1993 launch, scooped $19.8 billion of new money to take its global capitalisation to $307 billion.
That, of course, was before the equity market correction of February 2018 set in. Not to mention a sharp rise in bond yields. So what’s the situation been since then? We await the February news with eager anticipation.