Active ETF Assets Reach New Record

Despite a perceived stagnation in Europe, assets in actively managed exchange traded funds (ETFs) are on the rise on a global level.

Research from ETFGI found that active ETF assets increased 23 percent from the end of October 2013 to the end of October this year, with inflows of $8.9 billion over the first 10 months of 2015. Total assets stand at $32.9 billion, and the research stated that the industry is on track to end the year with record net inflows.

On a global scale there are 232 active ETFs/ETPs, yet their total assets make up 1.1 percent of the total $3 trillion invested in ETFs worldwide.

The U.S. is the largest market with a $21.8 billion share of active ETFs – or 66 percent – while Europe claims 19 percent market share, which accounts for $6.3 billion in 20 products.

Fixed income accounts for around three quarters of exposure in active ETFs/ETPs and is almost a “mirror opposite” to index ETF exposure, according to the research, where equity makes up the vast majority of exposure.

“Since 2007 over 80 applications have been filed in the United States with the Securities and Exchange Commission for active ETFs. Currently there are 31 issuers of active ETFs/ETPs in the United States. Many asset managers are waiting to see if/when the SEC allows non-transparent active ETFs,” said Deborah Fuhr, managing partner at ETFGI.

Europe has also made its own moves to promote these funds. Last November, the Irish Stock Exchange abolished the requirement for active ETF issuers to disclose their holdings every day, in a bid to encourage more listings.

In Europe, one of the most recent launches was an actively managed exchange traded note from Societe Generale and Twenty20 Investments. The fund has fees of 0.95 percent and was brought to market in March. It invests in the top five countries via five ETFs that have the most positive economic outlook.