ETF Assets reach record in 2013

Terry Flanagan

Deutsche Börse has listed the first actively managed exchange-traded fund for covered bonds as assets in the ETF/ETP industry reached a record last year.

Assets reached a new record $2.4 trillion at the end if 2013, according to preliminary findings from consultancy ETFGI’s global ETF and ETP industry insights report.

Deborah Fuhr, managing partner at ETFGI, said in a statement:“After spending most of 2013 wondering when and how the Fed would taper its QE scheme, investors felt a degree of positive cheer and certainty after the Fed announced in December that the US economy was strong enough for it to begin to taper by US$10 bn in January 2014.”

Last year net inflows of $242.8bn into global ETF/ETPs were lower than the net inflows of $265bn in 2012 but assets grew due to positive market performance.

Equities had record net inflows of $240.1b in 2013 as stock markets rose, followed by fixed income with $22.3bn. In contrast, commodities had record net outflows of $39.7bn as the gold price fell.

Among issuers, BlackRock’s iShares had the largest net inflows of $61bn last year, followed by Vanguard with $60.2bn. State Street Global Advisors’ SPDR was third with net inflows of $18.3bn, Invesco PowerShares took fourth place with $15.4bn followed by WisdomTree in fifth with net inflows of $14.4bn. Last year 102 providers launched 611 new ETFs/ETPs, more than the 595 launched in 2012.

This week Deutsche Börse listed the first actively managed bond ETF for covered bonds. Covered bonds, which are mostly issued in Europe, are debt instruments secured by a pool of mortgage loans with property as collateral to which investors have a preferential claim in the event of default. There were more than €2.8 trillion of covered bonds outstanding at the end of 2012.

The Pimco Covered Bond Source UCITS ETFA was listed on Deutsche Börse via Vestima, its fund processing platform, on January 13.

Philippe Seyll, member of the executive board of Clearstream and head oinvestment funds services, said in a statement: “We are pleased to introduce the first actively managed covered bond ETF, managed by Pimco, onto our Vestima platform, which currently gives access to more than 125,000 mutual funds. Our objective is to provide investors with a standardised process for all their fund transactions – from  mutual funds to ETFs and hedge funds – by using the same platform.”

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