Global exchange traded product (ETP) growth continued in 2012 with total assets increasing by 23% from 2011 to $1.9 trillion, according to a BlackRock report.
The report identifies 12 ETP trends for 2012:
- ETP flows maintained positive momentum throughout changing risk-on and risk-off market conditions.
- Declining and persistently low interest rates have not dampened fixed income ETP flows, now at an all time high of $68 billion through November and 13% higher than the annual record set in 2009.
- Minimum volatility equity funds were one of the more successful strategy-based categories with $4.4 billion of inflows, capitalizing on investors’ desire to manage volatility.
- While much has been written about active ETFs as a future driver of growth, the potential remains largely untapped with the category representing 1% of industry assets and 3% of 2012 TYD flows.
- Gold accounts for such a large portion of the commodity asset class that one could argue it has become its own asset class.
- Much has been written about ETP closures, but innovation continues, with 570 ETPs launched in 2012.
- Assets in emerging markets debt ETPs doubled in 2012 to $20 billion.
- Canada had the highest asset growth rate of any region at 29% for 2012.
- Among the top 15 new products in 2012, 10 are listed in Asia Pacific and six provide exposure to Chinese equities.
- There was notable divergence of $287 billion between flows into equity ETPs and out of equity mutual funds.
- The cyclical timing of 2012 flows was quite different than the typical pattern, with a stronger January than prior years.
- Breadth in the market continues to expand: the number of ETPs that have surpassed the threshold of $500 million in assets now total 480 offered by 51 providers, versus 340 offered by 45 providers in 2009.
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