The RISE and RISE of Global ETFs’ AUM

December 3, 2019 | Liquid Alternatives

In 2019, global ETF assets have added $840 billion from January 1st through October 31st, bringing the tally to a record $6 trillion.

According to EPFR, ETF AUM (assets under management) have grown six-fold in the decade since the global financial crisis. Interestingly, assets added $1 trillion every year since 2016.

What is interesting is that the composition of the AUM between the three major asset classes of Equities, Bonds and Commodities has not changed dramatically, though Bonds have gained at the expense of Commodities:

Asset class 2009 % 2019 %
Equity 77.1 76.8
Bonds 13.6 19.1
Commodities 9.1 3.8

ETF AUM:Unfolding trends

“There has been a dramatic surge in relative flows into ETFs with socially responsible or environmental, social and governance mandates,” said EPFR.”Research indicates this emerging trend reflect preferences of a growing cohort of millennial investors.”

“Since first quarter 2016 the collective performance gain for all Equity ETFs is 39% vs. 35% for ETFs with SRI/ESG mandates.”

ETFs to the fore

Within equities, however, there is a seismic shift between mutual funds and ETFs, according to an observation in this article on Nasdaq.com: Whereas in 2002, the breakup of equity market share between ETFs and Mutual Funds was 0.3% to 99.7%, in 2019 it transformed to 23.3% to 76.7% (EPFR data).

Rising ETF AUM: Which ETFs are raking it in this year?

  1. iShares Core MSCI EAFE ETF (IEFA) – $71.4 billion inflows- foreign companies-0.07% fees
  2. Vanguard Total Stock Market ETF (VTI) – $13.7 billion inflows – broad equities-0.03% fees
  3. iShares Edge MSCI Min Vol USA ETF (USMV) – $12.2 billion inflows – low volatility stocks-0.15% fees
  4. Vanguard S&P 500 ETF (VOO) – $12 billion inflows – S&P 500 stocks – 0.03% fees
  5. Vanguard Total International Bond ETF (BNDX) – $10.3 billion inflows-IG bonds-0.09% fees

[Related Story:  Default Contagion Out of Emerging Markets Could Take Down This ETF ]

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