Assets in US-listed ETFs grew at a record pace in 2017, new data has shown.
Independent consultancy ETFGI found that ETF assets increased by 34.3% to $3.42 trillion at the end of December from $2.55 trillion at the end of 2016 – the fastest growth in the industry since 2009, when the global economy was starting to recover after the financial crisis.
US economy looking up
Economic factors are looking positive, with 3.2% GDP growth year on year in the third quarter of 2017 compared to 3.1% in the second quarter. Donald Trump’s recent tax reform is also expected to boost capital markets and leading analysts to increase their 2018 GDP expectations from 2.1% to 2.5%. Unemployment is also at its lowest level since 2000.
The four largest fund-gatherers in 2017 were all broad-market ETFs.
Top fundraisers in 2017
The iShares Core S&P 500 ETF (IVV) gained $30.2 billion and now has $146.4 billion under management. It charges just 0.04% per year and has a high concentration of technology, financial and health care stocks.
Second on the list is the iShares Core MSCI EAFE ETF (IEFA), which grew by $20.9 billion to a total of $43.7 billion. It costs 0.08% and tracks companies in Europe, Australia, Asia and the Far East region. Most exposure is in Japan, the UK and France, with more than 50% in these countries.
Third, the Vanguard FTSE Developed Markets ETF (VEA) garnered $17.5 billion and now has $70.6 billion AUM. Costing just 0.07%, the fund tracks equities outside of the US, and top sectors are financials, industrials and consumer discretionary stocks.
Last but not least is the iShares Core MSCI Emerging Markets ETF (IEMG), which has been bolstered by $16.6 billion inflows last year, with total assets now at $45.7 billion. It is the most expensive of the group at 0.14% fees. IEMG tracks emerging market companies in countries such as China, South Korea and Taiwan with a focus on IT, tech, financials and consumer discretionary stocks.
Strong Europe ETF asset growth
ETFGI also found exponential growth – 40.1% – in Europe-listed ETFs, hitting a new record of $802.3 billion at the end of 2017, with most growth attributed to the top 20 funds.