In a feature on the IndexUniverse.com website a couple of days ago, Matt Hougan pointed out that US exchange-traded product assets under management reached a record US$705 billion at the end of September, according to data compiled by the National Stock Exchange.
If we add to this figure the US$58 billion in Asian ETF assets reported in the latest version of Deutsche Bank’s ETF liquidity trends report (dated October 5, so I’m taking a few liberties with dates here) and the US$192 billion in European ETF assets taken from the same source, we get a global total of US$955 billion.
If we then consider that in the month to date the MSCI world index is up a couple of percent in dollar terms, the S&P 500 is up 1.5%, the US dollar index is down a percent, and of course we’ve seen a great 6% rally in gold − not to mention the 140 tons of inflows (around 5 million ounces, worth over US$5 billion) to gold trackers this month − I’m guessing that we’re at least at the US$980 billion mark in ETP assets at this very moment.
I apologise for jumping the gun slightly with my headline but we must be within touching distance of the first trillion in assets. Perhaps we should redenominate ETP assets in gold to calm ourselves down when measuring the market’s growth.
But what’s next for the market? In Europe, at least, the focus amongst ETF providers seems to have shifted away from expanding asset class coverage and towards working out where additional efficiencies can be created in the ETF “manufacturing” process – hence the talk about developing ETF platforms – and of course to broadening the investor base to include more retail clients.
The latter effort seems vital (in Europe, at least) to keeping the ETF market on its amazing growth path. Tomorrow we’ll be running a thought-provoking interview with Julian Hince, who recently joined iShares to help boost its distribution of ETFs to individual investors in the UK, as an example of how issuers are approaching this challenge.
In the meantime (and I hope I’m not jinxing things and risking another market crash by saying this slightly prematurely), here’s to the next trillion!