December was a brutal month for equities across the planet, but investors evidently weren’t paralyzed by fear because they poured US$76.2 billion of net inflows into exchange-traded funds and exchange-traded products globally during the month, making it the second-biggest month ever for net inflows, according to ETFGI, a London-based ETF/ETP research and consultancy firm.
December’s net inflows trail only the $105.7 billion in January 2018, a polar opposite month marked by a substantial surge in equity prices.
The high net inflows in December could do only so much, though, as total assets invested in global ETFs/ETPs dipped 5.3 percent during the month to close the year at $4.8 trillion.
The high-water mark for assets was September 2018, at $5.3 trillion. Then came the fourth-quarter equities meltdown that shrank asset levels in ETFs and ETPs.
As a result, total assets in global ETFs and ETPs dipped 0.6 percent in 2018, as net inflows of $516 billion couldn’t quite offset declining asset values. And in what might be a sign of a maturing industry, last year’s net inflow total was a 21 percent decrease from 2017.
In a reflection of the defensive mindset investors felt last month, the top three ETFs by net new assets in December were three bond funds from BlackRock’s iShares unit: the iShares 1-3 Year Treasury Bond ETF (SHY), iShares Short Treasury Bond ETF (SHV) and iShares Core U.S. Aggregate Bond ETF (AGG).
As of year-end 2018 there were 7,657 ETFs/ETPs globally from 401 providers listed on 71 exchanges in 57 countries.