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Invesco’s MSCI World UCITS ETF has passed USD2 billion in assets under management, having grown 62% in AuM across 2020. The synthetic ETF, which tracks the performance of the MSCI World Total Return Index, has outperformed comparative physical ETFs and delivered better tracking error for investors across the year.
Invesco’s suite of synthetic ETFs, which include its S&P 500 and MSCI USA products, have seen record demand in 2020 as increasing numbers of investors switch to synthetic products.
Invesco’s synthetically replicated S&P 500, MSCI USA and MSCI World UCITS ETFs have outperformed the average of their largest physical competitors by 0.24%, 0.31% and 0.14% respectively over the 12 months to the end of September 2020. Over the past three years, these figures are 0.73%, 0.70% and 0.23%, underscoring the long-term relative outperformance of synthetic products.
Invesco’s MSCI World UCITS ETF, which passed USD2 billion in AuM for the first time in August, has become Invesco’s fourth largest ETF in Europe after the firm’s Physical Gold ETC, S&P 500 UCITS ETF and its EQQQ Nasdaq-100 UCITS ETF.
Its S&P 500 UCITS ETF is the largest synthetic ETF in Europe, with USD10.8 billion in AUM. It has seen the largest inflows of any competing product in Europe this year, with over USD1 billion of additional new assets to September-end, compared to over USD6 billion of outflows from the rest of the S&P 500 UCITS ETF sector.
Christopher Mellor, Head of EMEA ETF Equity & Commodity Product Management at Invesco, said: “The benefits of synthetic replication are increasingly being realised by investors. The method not only allows for more accurate tracking of the index, but can also offer a reduction in risk, with higher returns versus physical products and outperformance above the index.
“Our MSCI World product has seen very strong growth in 2020, much like our S&P 500 product, as investors look for competitive core investments. We expect continued reallocation from investors to synthetic products looking forwards.”
|
|
Sep 19 - Sep 20 |
Sep 18 - Sep 19 |
Sep 17 - Sep 18 |
Sep 16 - Sep 17 |
Sep 15 - Sep 16 |
Dec 18 - Dec 19 |
Dec 16 - Dec 19 |
|
Invesco S&P 500 UCITS ETF |
15.04% |
4.16% |
17.73% |
18.18% |
14.99% |
31.37% |
52.36% |
|
Average physical S&P 500 ETF |
14.77% |
3.88% |
17.47% |
18.17% |
14.98% |
31.01% |
51.49% |
|
Invesco outperformance |
0.24% |
0.27% |
0.22% |
0.01% |
0.01% |
0.27% |
0.57% |
|
Invesco MSCI USA UCITS ETF |
16.95% |
3.97% |
17.53% |
17.75% |
14.40% |
32.62% |
51.86% |
|
Average physical MSCI USA ETF |
16.59% |
3.69% |
17.41% |
18.01% |
14.57% |
32.25% |
51.42% |
|
Invesco outperformance |
0.31% |
0.28% |
0.10% |
-0.21% |
-0.15% |
0.27% |
0.29% |
|
Invesco MSCI World UCITS ETF |
10.60% |
2.00% |
11.31% |
18.19% |
11.32% |
28.82% |
43.07% |
|
Average physical MSCI World ETF |
10.45% |
1.90% |
11.33% |
18.28% |
11.52% |
28.64% |
42.94% |
|
Invesco outperformance |
0.14% |
0.10% |
-0.02% |
-0.08% |
-0.18% |
0.14% |
0.09% |
Data: Bloomberg, in USD terms. Past performance is not a reliable indicator of future returns.
