ETF assets to pass $1 trillion
Assets under management in exchange traded funds will hit $1 trillion (€766bn) by next year and double that amount by 2011, according to ETF guru Deborah Fuhr, as investors withdraw from active funds in favour of more liquid, passive investments.
Speaking at Financial News' 'Investing in ETFs' conference in Frankfurt yesterday, Fuhr, global head of ETF research and implementation at Barclays Global Investors, said that there had been large inflows into fixed-income ETFs and exchange traded commodity funds amid market turmoil in the last quarter.
She said that managers will invest in equity ETFs when they predict a market rally, to capitalise on positive trends.
There were inflows of $5bn across the entire ETF market in Europe in September, according to Fuhr. She added that while assets under management in the products have fallen 4.1% this year, that is much less than the 25.6% fall of the MSCI Index.
At present there is $800bn in assets under management in ETFs worldwide and this is expected to grow as inflows from Europe, Asia and the Middle East offset slow ingrowth in the traditional ETF market in the US.
Fuhr said: “I’ve spent a lot of time recently in the Middle East, first in Dubai and then the Middle East. Several exchanges in the region are keen to list ETFs, while there is also interest from Africa and Asia.
"We expect significant growth as the market comes back in the US.”
ETFs operate as mutual index funds either buying or taking out a derivative on a basket of assets. The fund is then listed on an exchange to provide intra-day liquidity.
Write to mturner@efinancialnews.com
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