GLOBAL - Total exchange traded fund (ETF) assets under management (AuM) fell in 2008, although tradi...
GLOBAL - Total exchange traded fund (ETF) assets under management (AuM) fell in 2008, although trading volumes and products rose, according to Barclays Global Investors (BGI).
During 2008, the total AuM of ETFs fell 10.8% to $711bn, although this was a far less severe decline than the 42% drop seen on the MSCI World index.
Given the extreme volatility of the past year, BGI said increasing number of investors had turned to ETFs as a way of gaining exposure to various asset classes while minimising risks.
In a statement, Deborah Fuhr, managing director and global head of ETF research & implementation strategy, BGI said: "While 2008 was a catastrophic year for the markets and many investment products. There was almost no where to hide from the crash of 2008. The crash of 2008 was fast, deep and volatile.
"Just about the only assets to prosper were government bonds of developed countries and gold."
The number of ETFs grew by more than a third (36%) to 1590 products, with 2658 listings on 42 exchanges.
Overall sales of ETFs topped $187.5bn up to October 2008, compared to net sales of minus $256.7bn for mutual funds.
BGI said there were also plans to launch a further 600 ETFs, while the market was still predicted to top $2trn by 2011 (etfmonline.com; 6 November 2008)
On a geographical basis, Japan saw the largest decline in AuM, falling by close to a fifth (19.8%) while the US remained the largest market, with total assets of more than $700bn.
In contrast to the declines on other major ETF markets, European ETF assets actually rose 11.2% during the course of 2008 with the number of products also rising by 49.4% to 632.
Deutsche Bank's db x-tracker ETFs also reported a strong 2008, with full year inflows of €12bn, split €6.77bn equities and €5.24bn fixed income.
Ending the year, the company said it saw strong inflows in December, partly explained by changes to German tax law (known as the Abgeltungssteuer effect) which meant investments prior to the New Year would enjoy tax free gains.
Thorsten Michalik, head of db x-trackers, Deutsche Bank, said: "In December 2008 alone we had a net inflow of €2.6 billion, mostly in our equity ETFs. During the four first trading days of 2009 over €1 billion was invested in db x-trackers ETFs, proving that the Abgeltungssteuer effect was not the only driver for December inflows."
He added: "2009 will be the year of the ETF. We are planning to expand our product line in the UK and internationally. In February db x-trackers will list in Asia for the first time, gaining exposure for our ETFs in a new market.
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