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Investors Embraced Active ETFs, Products In November; ESG Vehicles Prosper

Tom Burroughes, Group Editor , January 2, 2019

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Funds and products following certain investment ploys such as use of leverage and short-selling drew in more assets during November last year.

Exchange traded funds and products replicating returns from active trading strategies, such as capturing the effect of leverage or use of short-selling, pulled in $3.64 billion of net inflows during November, taking total invested assets to $109.39 billion at the end of that month, up 3.11 per cent from October.

The data comes from ETFGI, an organisation tracking ETFs and similar investment vehicles. 

“While trade talks continue to make noise in the headlines, the very real prospect of slowing global growth appears to be filtering into market sentiment,” Deborah Fuhr, managing partner and a founder of ETFGI, said. 

At the end of November 2018, the actively managed ETF/ETP industry had 611 ETFs/ETPs, with 773 listings, assets of $109 Bn, from 127 providers listed on 20 exchanges. 

Equity focused actively managed ETFs/ETPs listed globally attracted net inflows of $276 million in November, growing net inflows for 2018 to $6.31 billion, slightly less than the $6.37 billion in net inflows at this point last year. Fixed Income focused, actively managed ETFs and ETPs listed globally saw net inflows of $3.63 billion, bringing net inflows for 2018 to $24.43 billion, greater than the $16.91 billion in net inflows at this point of 2017.

ETFs are typically open-ended, index-based funds, with active ETFs and can be bought and sold like ordinary shares on a stock exchange and offer broad exposure across developed, emerging and frontier markets, equities, fixed income and commodities. Exchange traded products are products that have similarities to ETFs in the way they trade and settle but do not use an open-end fund structure. The use of other structures including unsecured debt, grantor trusts, partnerships, and commodity pools by ETPs can, in addition to a significantly different risk profile, create different tax and regulatory implications for investors when compared to ETFs, which are funds. An actively managed ETF or ETP has a manager or team deciding on the underlying portfolio allocation, otherwise not adhering to a passive investment strategy. 

ESG

Environmental, social, and governance ETFs and ETPs listed globally gathered net inflows of $856 million in November. Total assets invested in such entities rose by 6.64 per cent from $21.77 billion at the end of October, to $23.22 billion.

 




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