Global ETFs Attracting Record Inflows | ETF Trends

The global exchange traded fund industry continued to enjoy record inflows over 2015 despite a tumultuous year for the markets.

According to ETFGI data, the global exchange traded products industry, which includes both ETFs and exchange traded notes, gathered a record $372.0 billion in net inflows over 2015, or a 10% increase over the prior record of $338.3 billion in new inflows for 2014.

The ETP industry has been accumulating net inflows for the 23 consecutive months in December, which was also the best month for asset gather last year with $55.0 billion in new assets. Total assets under management have increased to $2.992 trillion from $2.784 trillion in 2015.

Along with asset growth, the ETP universe has been quickly expanding its number of fund offerings. In 2015, the number of ETPs increased to 6,146 from 5,550, and the number of listings expanded from 11,750 to 10,771. Meanwhile, the number of providers rose to 276 from 239 as more money managers try to jump on the ETF bandwagon, notable entrants include prominent mutual fund providers like Goldman Sachs and John Hancock.

The growth in the ETF space continued despite the sell-off in equities, with the stock markets more or less flat for the year.

“2015 was a turbulent year for the markets due to uncertainty in China which spilled over into global markets, concerns about the Middle East and a collapse in energy prices,” Deborah Fuhr, Managing Partner of ETFGI, said in a press release. “The S&P 500 ended the year up 1%, emerging markets declined 14% on the heels of a stronger U.S. dollar and commodity price declines. Developed markets ended the year down 1% after recovering some losses in the fourth quarter.”

The continued inflows into ETFs suggests that more investors are turning to the investment vehicle to capture the market moves and shifting environment

“The record level of asset gathering in 2015 shows that more investors are using ETFs/ETPs in more ways due to the market turmoil: retail is using more ETFs through Robo-advisors, institutions are using ETFs as alternatives to futures, and financial advisors are using more ETFs especially in multi-asset portfolios,” Fuhr added.

The iShares and Vanguard ETFs were among the most popular fund providers, attracting $139.4 billion and $84.6 billion in net flows for 2015, respectively. Additionally, Deutsche Asset & Wealth Management’s x-trackers series came in third with $28.4 billion in net inflows.

Vanguard and iShares have upped the ante by cutting costs to bring in long-term investors who are seeking low investment fees. Meanwhile, DeAWM has enjoyed greater interest largely due to its suite of currency-hedged international stock ETFs that promise to provide overseas exposure while diminishing currency risks.

As of the end of 2015, iShares was the largest global ETF provider with $1.11 trillion in assets under management, followed by Vanguard at $509.6 billion and State Street’s SPDR with $443.2 billion.

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.