Earlier this month, the U.S. exchange traded products hit a major milestone when combined assets uner management across exchange traded funds and notes topped $2 trillion.
“Through December 22nd, assets have increased 18% this year from $1.698 trillion to $2.007 trillion based on positive market performance and net new assets,” according London-based ETF research firm ETFGI. And through the first 11 months of 2014, U.S. ETFs added nearly $190 billion, more than almost $180 billion captured in all of 2013. [U.S. ETFs Hit $2 Trillion Milestone]
With the S&P 500 up 12.6% this year and flirting with record highs, it is not surprising that equity ETFs are leading asset gatherers.
“Domestic stock ETF assets saw the strongest gains. Their assets increased by $53.3 billion in November and $222.3 billion since November 2013. Meanwhile, the S&P 500 rose 2.75% in November,” reports Aparna Narayanan for Investor’s Business Daily.
The top three asset-gathering ETFs this year are all S&P 500 funds as the SPDR S&P 500 ETF (NYSEArca: SPY),Vanguard 500 Index (NYSEArca: VOO) and the iShares Core S&P 500 ETF (NYSEArca: IVV) have hauled in over $43.6 billion in new assets combined.
As of Dec. 26, there was $311.1 billion allocated to sector ETFs with energy ETFs accounting for $44.7 billion of that total, according to Bloomberg. The Energy Select Sector SPDR (NYSEArca: XLE) is the only sector ETF among the top 10 ETFs for 2014 inflows.
However, investors have poured nearly $2.6 into the Consumer Staples Select Sector SPDR (NYSEArca: XLP) and over $3 billion into the Utilities Select Sector SPDR (NYSEArca: XLU) and Health Care Select Sector SPDR (NYSEArca: XLV) combined.
“Assets in stock ETFs that invest primarily overseas rose $10.2 billion in November to a total of $434.4 billion. Their assets increased 10% from $395.2 billion in November 2013,” according to IBD.
The bulk of inflows to international ETFs have been devoted developed markets funds with the Vanguard FTSE Developed Markets ETF (NYSEArca: VEA) and the iShares MSCI EAFE ETF (NYSEArca: EFA) leading the way with combined 2014 inflows of about $12.2 billion.
On a percentage, few large international ETFs have been able to keep pace with torrid asset-gathering pace set by the WisdomTree Europe Hedged Equity Fund (NYSEArca: HEDJ).
Only eight ETFs have added more new assets than HEDJ this year. HEDJ has added $4.9 billion in new assets this year and has gone from being a $1 billion ETF in April to a $5.5 billion fund today. [Boom Continues for Hedged Europe ETF]
SPDR S&P 500 ETF
Tom Lydon’s clients own shares of EFA, IVV and SPY.