Investors scaled back into stock exchange traded funds amid October’s strong rally, according to industry data.
According to a Deutsche Bank research note, U.S.-listed exchange traded products saw new inflows of $107.8 billion in October, bringing total ETP assets to $1.07 trillion, or up 7.2% year-to-date. Globally, ETP assets under management hit $1.49 trillion, or up 6.9% year to date. [ETFs See $24 Billion Inflow in October]
Long-only ETPs garnered $22.2 billion in inflows for the month, compared to the $3.3 billion in September. Long-only fixed-income ETPs also added on $4.4 billion in new money. In contrast, long-only commodity ETPs bled $0.26 billion.
U.S.-based stock ETPs benefited the most from the risk-on sentiment, increasing by $13 billion, followed by emerging market equities with $4.8 billion, dividends at $2.8 billion and U.S. domestic cyclical sectors at $1.2 billion.
Corporate bonds ETPs also added $3.7 billion. Short-term fixed-income ETPs lost $1 billion, which shows investors are losing interest in safe-haven assets.
As a whole, ETFs continued to gain market share at the expense of futual funds, with ETF assets under management at 10.1% of mutual fund assets at the end of September.
For October, 17 new ETPs and 10 new ETNs were listed. Most of the new funds provide access to existing markets but with new target strategies.
Monthly turnover dropped 6.4% to $1.9 trillion, compared to $2 trillion in September, with the largest decline in equity ETP turnover, followed by commodities. On the other hand, fixed-income ETP turnover rose.
Total U.S. ETP trades accounted for 33.6% of all U.S. cash equities trading for the month, which is above its three-year monthly average of 31.5%.
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Max Chen contributed to this article.