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SSGA Reports ETF Flows Hit $284 Billion in 2016

Traders Magazine Online News, January 11, 2017

John D'Antona Jr.

It looks like 2016 was a record year for flow in the exchange traded fund sector, according to a recent report from money manager State Street Global Advisors.

SSGA reported that 2016 was a record-breaking year for ETF flows, as total fund flows for the industry hit $284 billion, $39 billion more than the previous record set in 2015, according to its US ETF Flash Flows.

Dave Mazza, author of the report and Head of Research for SPDR ETFs and SSGA Funds, noted that Fixed Income ETFs amassed over $90 billion in assets in 2016, nearly doubling 2015 totals of $58 billion.  Bond based funds surpassed the 2015 record in August, and added an additional $30 billion to close out the year.

“Although equity ETFs fell short of the yearly flows record of $196 billion set in 2013, in November, equity based funds broke the record for most flows in a month with $49 billion of net flows—the record was broken again in December when equity ETFs attracted over $58 billion in assets,” Mazza noted.

Also, US focused ETFs had accumulated a meager $6.5 billion in assets through the first six months of the year.  In the last six months of the year, they attracted over $160 billion—a record amount and nearly $100 billion more than amassed in 2015.

When it came to sub-sectors, Materials, Financials and Energy stood out the most, SSGA reported. The Materials sector benefitted from the increased demand in metal and mining firms, while the surging price of oil boosted the Energy sector to its largest yearly gain since the financial crisis.  Mid-year the Financial sector had net outflows of -$6 billion; the sector went from laggard to leader and took in over $10 billion in November and December alone.

High yield ETFs now stand at a record in terms of assets under management with nearly $46 billion.

Lastly, precious metal related funds, most of which are backed by gold, experienced the first positive fund flow total since 2012, ending a three year losing streak.

For the full report, please click here

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