ETFGI reported that assets invested in ETFs and ETPs listed globally amounted to US$4.82 trillion at the end of Q4 2018, following net inflows of US$164.84 billion and market moves during the period…..
By Deborah Fuhr, Managing Partner at ETFGI
The Global Hedge Fund industry saw assets fall to US$3.11 trillion, with net outflows of US$22.5 billion during the quarter, according to ETFGI’s Q4 2018 Global ETF and ETP industry landscape insights report, an annual paid-for research subscription service. (All dollar values in USD unless otherwise noted.)
Highlights
Asset growth of global ETF/ETP industry continues to outpace global Hedge Fund industry.
$4.82 trillion invested in 7,620 ETFs/ETPs listed globally at end of 2018.
$3.11 trillion invested in 8,311 Hedge Funds listed globally at end of 2018.
According to analysis by ETFGI, $4.82 Tn was invested in 7,620 ETFs/ETPs listed globally at the end of 2018, representing growth in assets of -0.49% over the year, impacted by sharp declines in the major indices during the last quarter.
During 2018, assets invested in Hedge Funds globally fell by 3.24% to $3.11 Tn in 8,311 hedge funds, according to a report by Hedge Fund Research.
Comparatively, assets invested in ETFs/ETPs had increased 36.23%, from $3.55 Tn to $4.84 Tn in 2017. Over the same period, assets invested in the Global hedge fund industry increased 6.37%, from $3.02 Tn to $3.22 Tn.
The HFRI Fund weighted composite index returned -5.76% in Q4 compared to -13.52% of the S&P 500 index (w/dividends), as many Hedge Funds strategies positioned for a market correction finally came to fruition.
Despite this, investors still ploughed money into passive funds, with ETFs/ETPs attracting $164.84 Bn in Q4, while withdrawing $22.5 Bn from Hedge Funds.
Assets invested in the global ETF/ETP industry first surpassed those invested in the hedge fund industry at the end of Q2 2015, as ETFGI had forecasted.
Growth in assets in the ETF/ETP industry has outpaced growth in the hedge fund industry since the financial crisis in 2008.
In 2018 the return of the S&P 500 Index was marginally better than the performance of the HFRI Fund weighted Composite index: -4.39% vs. -4.49%, respectively.
Returns of the HFRI Fund Weighted Composite Index and the S&P 500 Index
Year | HFRI Fund Weighted | S&P 500 |
Composite Index | Index w/ dividends | |
2011 | -5.25% | 2.09% |
2012 | 6.36% | 15.99% |
2013 | 9.13% | 32.36% |
2014 | 2.98% | 13.65% |
2015 | -1.12% | 1.38% |
2016 | 5.44% | 11.93% |
2017 | 8.68% | 21.80% |
2018 | -4.49% | -4.39% |
Sources: Hedge Fund Research HFR, S&P Dow Jones Indices
During 2018, ETFs/ETPs listed globally gathered $516 Bn in net inflows, according to ETFGI’s Global ETF and ETP industry insight report. December 2018 also marked the 59th consecutive month of net inflows into ETFs/ETPs. Over the same period, HFR reported net outflows of $33.5 Bn from Hedge Funds. Assets invested in the global ETF/ETP industry continue to grow, extending their lead over assets invested in the global hedge fund industry, the gap widening by 5.30%, from $1.62 Tn at the end of 2017 to $1.71 Tn.
The top 20 ETFs by net new assets in 2018, collectively gathered $206 Bn. The TOPIX Exchange Traded Fund (1306 JP) alone accounted for net inflows of $22.29 Bn over the period.
Top 20 ETFs by net new assets 2018: Global
| Name | Ticker | Assets | NNA | NNA |
| TOPIX Exchange Traded Fund | 1306 JP | 71,167 | 2,166 | 22,288 |
| iShares Core MSCI EAFE ETF | IEFA US | 52,331 | 860 | 20,802 |
| iShares Core S&P 500 ETF | IVV US | 147,540 | 2,470 | 18,592 |
| iShares Core MSCI Emerging Markets ETF | IEMG US | 49,202 | 1,142 | 15,738 |
| Vanguard S&P 500 ETF | VOO US | 90,519 | (2,092) | 13,418 |
| iShares Short Treasury Bond ETF | SHV US | 20,690 | 3,340 | 12,672 |
| Daiwa ETF TOPIX | 1305 JP | 34,176 | 1,355 | 11,166 |
| Vanguard Total Stock Market ETF | VTI US | 93,577 | 1,987 | 9,848 |
| Vanguard FTSE Developed Markets ETF | VEA US | 65,145 | 2,080 | 9,639 |
| iShares 1-3 Year Treasury Bond ETF | SHY US | 20,624 | 3,357 | 9,288 |
| Listed Index Fund TOPIX | 1308 JP | 31,765 | 1,264 | 9,198 |
| Vanguard Value ETF | VTV US | 41,408 | 1,167 | 8,404 |
| Nikkei 225 Exchange Traded Fund | 1321 JP | 50,018 | 1,210 | 7,319 |
| SPDR Bloomberg Barclays 1-3 Month T-Bill ETF | BIL US | 8,668 | 1,696 | 6,724 |
| iShares Core S&P Small-Cap ETF | IJR US | 37,292 | 8 | 5,733 |
| iShares Core MSCI Total International Stock ETF | IXUS US | 11,989 | 299 | 5,693 |
| iShares Core U.S. Aggregate Bond ETF | AGG US | 57,078 | 2,669 | 5,559 |
| JPMorgan Ultra-Short Income ETF | JPST US | 5,129 | 719 | 5,065 |
| iShares Floating Rate Bond ETF | FLOT US | 11,319 | (1,003) | 4,830 |
| iShares Core S&P 500 UCITS ETF | CSSPX SW | 28,664 | (229) | 4,559 |
Similarly, the top 10 ETPs by net new assets collectively gathered $9.99 Bn by the end of 2018.
Top 10 ETPs by net new assets 2018: Global
| Name | Ticker | Assets | NNA | NNA |
| Xtrackers Physical Gold ETC (EUR) | XAD5 GY | 2,536 | 110 | 1,884 |
| iShares Gold Trust | IAU US | 11,545 | 345 | 1,599 |
| Barclays ETN+ FI Enhanced Global High Yield ETN | FIYY US | 1,285 | (39) | 1,259 |
| iShares Physical Gold ETC | SGLN LN | 4,350 | 635 | 1,170 |
| ProShares Short VIX Short-Term Futures | SVXY US | 338 | 0 | 1,051 |
| Barclays ETN+ FI Enhanced Europe 50 ETN | FFEU US | 616 | 16 | 806 |
| NH QV KOSPI Volatility Matching Strangle ETN 57 | 550057 KS | 629 | 623 | 623 |
| ETFS Physical Gold | PHAU LN | 6,662 | 295 | 536 |
| VelocityShares Daily 3x Inverse Natural Gas ETN | DGAZ US | 377 | (382) | 534 |
| FI Enhanced Global High Yield ETN | FIHD US | 1,391 | 70 | 528 |