EPFR's industry leading research highlights important inflection point as ETFs reach landmark milestone a decade after Global Financial Crisis
BOSTON, Nov. 20, 2019 /PRNewswire/ -- EPFR, a subsidiary of Informa plc (LSE: INF) and a worldwide industry leader in providing fund flows and allocation data to financial institutions, announced that global ETF assets have surpassed $6 trillion in assets according to their research. In recognizing this historic milestone, EPFR has outlined key trends and drivers that have accelerated ETF industry growth globally.
In 2019, Global ETF assets have added $840 billion from January 1st through October 31st highlighting accelerated growth that has realized a new trillion-dollar plateau in each of the last four years. Since the Global Financial Crisis (GFC), ETF assets have grown six-fold, hitting trillion-dollar milestones:
$1 trillion in December 2009
$2 trillion in July 2013
$3 trillion in March 2016
$4 trillion in May 2017
$5 trillion in January 2018
$6 trillion in November 2019
The Emergence of Equity ETFs
The allocation breakdown of major asset classes for ETFs has not changed much since the GFC. The growth in Equity ETFs has been considerable when compared to Equity Mutual Funds. Since 2002, EPFR has tracked how Equity ETFs have consistently taken away market share from Equity Mutual Funds.
December 31, 2009
September 30, 2019
Equity: 77.1%
Equity: 76.8%
Bond: 13.6%
Bond: 19.1%
Commodity: 9.1%
Commodity: 3.8%
ETFs provide structural benefits that can be attractive for investors. As a rising tide lifts all boats, accommodative monetary policies from major central banks have boosted prices for nearly every asset class. In the U.S., where over $4 trillion of global ETF assets are domiciled, the taxation of ETFs is more favorable and exerts less of a drag on performance than it does for regular funds.
Global Growth
While $4.2 trillion of the $6 trillion in global ETF assets are domiciled in the U.S., other parts of the globe have also realized an increase in fund flows since the GFC.
Nearly half of the $2.4 trillion that has flowed into the Equity ETFs tracked by EPFR since 2002 have gone to funds with U.S. mandates
Two-thirds of the total AUM in EPFR-tracked ETFs are managed by U.S. domiciled funds
One U.S. fund provider accounts for over one-third of the total AUM of all ETFs tracked by EPFR Global
36% of the ETFs tracked by EPFR are domiciled in the US, down from 71% in fourth quarter 2016
The Next Wave of Asset Growth
As different strategy types can come in and out of favor due to market trends and investor appetite, there has been a dramatic surge in relative flows into ETFs with socially responsible or environmental, social and governance mandates. EPFR research indicates this emerging trend reflect preferences of a growing cohort of millennial investors. Older investors recognize SRI/ESG as a means of getting another layer of due diligence without sacrificing performance. Since first quarter 2016 the collective performance gain for all Equity ETFs is 39% vs. 35% for ETFs with SRI/ESG mandates.
"The global growth of ETFs is undoubtedly an ongoing validation of how financial institutions and investors are electing to allocate," said Cameron Brandt, director of research at EPFR. "With our comprehensive data and fund flows research, we seek to provide essential analysis to serve as an industry differentiator. This $6 trillion milestone provides an important inflection point of how much growth has occurred over the last decade since the Global Financial Crisis as well as to look ahead at future potential growth areas."
About EPFR EPFR, a subsidiary of Informa plc (LSE: INF), provides fund flows and asset allocation data to financial institutions around the world. Tracking over 100,100 traditional and alternative funds domiciled globally with more than $34 trillion in total assets, we deliver a complete picture of institutional and retail investor flows and fund manager allocations driving global markets. Our market moving data services include daily, weekly and monthly equity and fixed income fund flows and monthly fund allocations by country, sector and industry. For more information, visit the EPFR website.
About Informa Financial Intelligence Financial Intelligence, part of the Informa Intelligence Division of Informa plc, is a leading provider of products and services helping financial institutions around the world cut through the noise and take decisive action. Informa Financial Intelligence's solutions provide unparalleled insight into market opportunity, competitive performance and customer segment behavioral patterns and performance through specialized industry research, intelligence, and insight. For more information, please visit https://financialintelligence.informa.com.
Media Contact: Zachary Allegretti JConnelly 973-850-7341 [email protected]
Share this article