The exchange traded products (ETPs) market, of which exchange traded funds (ETFs) are a subset, continues to grow at a rapid pace, with assets flowing into global ETPs hitting new highs.
While the ETP market is dominated by the US, other markets including the UK and Europe are also growing at a fast rate. ETF Securities (UK) Limited notes that the first European ETP was listed on the Frankfurt Exchange way back in 2001.
Positive month for ETPs
Global ETPs gathered $36.2 billion in October, according to BlackRock’s October Global ETP Landscape report. The market was boosted by increased stimulus efforts and diminished expectations for a rate hike by the US Federal Reserve (Fed) this year.
However, this stance by the Fed might change come December following the creation of over 271,000 jobs in the US in October, helping to reduce unemployment by 5%. Despite this, the ETPs industry remains on record pace with $270.9 billion taken year-to-date.
Fixed income ETPs saw another month of strong flows, gathering $14.7 billion and driving year-to-date flows above the full-year 2014 total. Global assets under management in the asset class also surpassed $500 billion for the first time, highlighting the increased use by investors of fixed income ETPs.
US equity markets rebounded from September’s lows which benefitted US equity ETPs. Behind this revival were strong performances from technology companies and robust mergers and acquisitions – led in no small part by the AB InBev/SAB Miller and Dell/EMC acquisitions.
US-listed products took assets of $28.4 billion in October, while European ETPs, including the UK, took $7.3 billion, focused in Pan-European equities as well as corporate and sovereign bonds.
Find out more about ETPs and how to buy them via TD Direct Investing.
Exchange Traded Products (ETPs) including ETFs, ETCs and ETNs track a wide variety of underlying investments, some of which may be complex in nature and involve leverage, shorting or a high degree of volatility. It is therefore important that you read the Prospectus or Fact Sheet (available on the issuers’ websites) prior to investing and ensure that you understand how it is structured and the associated risks.
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