Global ETF assets rose by 11% in the first half of 2009, Barclays Global Investors (BGI) reports in its July 2009 ETF Landscape publication, released last week. However, it reveals that daily ETF trading volumes in 2009 are so far running 17% below those seen last year.
The BGI report says that by the end of June, global ETF assets had reached US$789 billion. The 11% growth rate in assets in the year to date exceeded the 4.8% increase in the MSCI World index over the same period, implying continuing inflows to ETFs from investors.
Quoting research firm Strategic Insight, BGI estimates that investor inflows to ETFs totaled US$36.6 billion during the first five months of the year. By comparison, net sales of mutual funds totaled US$99 billion over the same period.
According to BGI, a comparison between the US and European ETF markets shows that the European market continues to grow at a faster pace. ETF assets rose 16.3% in Europe over the first half but only 8.2% in the US.
The number of European ETFs exceeded the tally in the US for the first time, reaching 713 by the end of June versus 693 in the US. However, the US ETF market remains substantially larger, totaling US$538 billion as opposed to Europe’s US$166 billion at the end of the first half.
BGI notes that the average total expense ratio for European equity ETFs is slightly higher than across the Atlantic, at 37 basis points compared to 32 basis points in the US. Compared to the 2008 average, first half trading volumes fell further in the US market, by 18.5% versus 5% in Europe.
Smart beta isn’t smarter than cap weighting, but it is different, and that’s good.
Trial by fire is one way to discover why ETF transparency matters.
Most people now realize leveraged ETFs can hurt you, but how, then, to use them?
What would a shift out of a mutual fund and into an ETF look like up close?