ETFGI Reports Asset Growth And Net Inflows In Global ETFs - ETPs Industry Continues To Outpace Global Hedge Fund Industry In Q4 2018

ETFGI, a leading independent research and consultancy firm covering trends in the global ETF/ETP ecosystem, reported today 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. 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

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 59^th 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

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