Investors’ penchant for income and total return and a return to equities will fuel the next wave of exchange-traded fund product innovation in 2013, according to State Street Global Advisors latest ETF report.
According to the report, the global exchange-traded product industry attracted nearly $200 billion of positive flows during the first eleven months of 2012 – propelling global ETP assets under management to $1.8 trillion. The asset classes favored by ETF investors this year include US fixed income ($32.2 billion in ETF inflows), emerging markets equity ($20.2 billion), and US equity large cap blend ($16.6 billion). Investors also significantly increased their exposure to commodities/precious metals ETPs ($13.8 billion of inflows) and high yield fixed income ETFs ($12.6 billion).
“On the eve of the ETF industry’s 20th anniversary, product development is poised to shift toward solutions oriented funds,” said David Mazza, head of ETF investment strategy at State Street Global Advisors. “Fueled in part by prevailing economic uncertainty and increasing competition across the global ETF landscape, investors can expect to see more unique fixed income and active ETFs come to market during this new chapter in product development.”
State Street manages more than $337 billion in SPDR ETF assets worldwide as of September 30.