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Global ETF/ETP Assets Hit Record $3.137 Trillion High
Assets invested in exchange traded funds (ETFs) and exchange traded products (ETPs) listed globally reached a new record high US$3.137 trillion at the end of April 2016, according to preliminary data from ETFGI’s April 2016 global ETF and ETP industry insights report.
Record levels of assets were also reached at the end of April for ETFs/ETPs listed in the United States at US$2.217 trillion, in Canada US$77.42 billion, in Europe US$533.34 billion, in Japan US$145.93 billion and in Asia Pacific ex-Japan which reached US$125.21 billion.
At the end of April 2016, the Global ETF/ETP industry had 6,297 ETFs/ETPs, with 12,126 listings, assets of US$3.137 trillion, from 283 providers listed on 65 exchanges in 51 countries.
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Deborah Fuhr, managing partner at ETFGI, said following a strong market performance in March the S+P 500 index was up just 0.39% in April.
“Developed markets ex-US were up 3.20%, while emerging markets ended up 1.05%,” Fuhr said. “The S+P GSCI commodity index was up 10.14% in April. There is still a significant amount of uncertainty in the markets due to the upcoming Brexit vote, the US election, the efficacy and future of QE programs around the world.”
In April 2016, ETFs/ETPs listed globally gathered net inflows of US$10.13 billion this marks the 27th consecutive month of net inflows. Fixed income ETFs/ETPs gathered the largest net inflows with US$7.73 billion, followed by equity ETFs/ETPs with US$2.39 billion, while commodity ETFs/ETPs experienced net outflows with US$136 million.
[related_stories]YTD through end of April 2016, ETFs/ETPs have seen net inflows of US$79.402 billion. YTD record level of net new assets have been gathered by fixed income ETFs/ETPs with US$48.66 Bn, Commodity ETFs/ETPs with US$14.425 billion, leveraged inverse ETFs/ETPs with US$4.67 billion and Inverse ETFs/ETPs with US$2.39 billion.
In April iShares gathered the largest net ETF/ETP inflows in April with US$6.01 billion, followed by Vanguard with US$5.98 billion and ProShares with US$1.18 billion in net inflows.
WallachBeth Friday ETF Snapshot
Equities fought back after the market was surprised by a low payrolls number on Friday.
SPX closed up +0.32% on Friday and down -0.39% on the week as 160,000 jobs were added to non-farm payrolls last month, well under the 200,000 estimate, with unemployment sticking at 5%.
Private payrolls came in low as well, with a drop in the participation rate. Overseas, the Shanghai Composite slid 2.8% at the close on Friday, erasing any gains from this week.
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Metal and energy stocks were among those reversing their recent surge, with regulators stepping in to calm the boom/bust cycle taking hold of Chinese commodity futures. DB Harvest China A-Shares (ASHR) finished down roughly 3% on selling pressure.
Top notable creations this week were SPDR Gold Trust (GLD), iShares Investment Grade Corp Bond (LQD), and iShares TIPS Bond (TIP).
Top notable redemptions were iShares High Yield Corp Bond (HYG), iShares MSCI Eurozone (EZU), and SPDR Industrials (XL).
Headlines out of Brazil kept iShares MSCI Brazil (EWZ) choppy throughout Friday. The Supreme Court ordered the countries house speaker, who led the impeachment drive, to relinquish his post. The decision isn’t likely to stop the impeachment process, which is put to a vote on May 11. Fitch also downgraded Brazil’s credit rating further into junk, from BB+ to BB, citing political uncertainly that is sapping domestic confidence and undermining governability.
Looking at equities, the buying interest continued for iShares Mortgage Real Estate (REM) as REITS outperformed. SPDR Utilities (XLU) underperformed over the day. It seems Gundlach’s pair trade that was suggested on Wednesday has become reality.
The idea being that the flight to Utilities has increased its book value to 1.9x while REITS have stayed at 0.8x, and expecting the historically correlated sectors to converge over time. Con Edison dragging the XLU basket down with an earnings miss helped as well.
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WallachBeth’s SCOUT team also commented on XLU’s valuation, which has gone from a yield above 4% to only 3% and from just above 15x forward earnings to almost 18x as safety and low volatility equities have been artificially pumped up by allocators. In internationals, iShares MSCI Peru (EPU) looked to have an active block seller.
Finally, for Fixed Income/Commodities, SPDR 1-3 Month T-Bill (BIL) had a large seller after the open, trading roughly 3x ADV. VanEck Vectors Emerging Markets High Yield (HYEM) looked to have some activity over the day; trading 23x ADV on what looked to be buyers. SPDR Emerging Markets Bond (EBND) had some massive buyers, along with WisdomTree Emerging Markets Local Debt (ELD).
VanEck Vectors Wide Moat (MOAT) caught a large block seller, trading 16x ADV. WallachBeth also noticed a roll into longer dated high yield corporate bonds. The seller exited Guggenheim BulletShares 2016 High Yield (BSJG), and looked to buy Guggenheim BulletShares 2018 High Yield Bond (BSJI). PowerShares DB Commodity (DBC) looked to have a large inflow, as the basket of commodities had an impressive pop Friday morning.
For more information on the Equity ETF market, visit our Equity category.