February data from TrackInsight, the world’s first global Exchange-Traded Funds analysis platform, shows that ETFs continued their seemingly unstoppable growth trajectory to reach a new global high of $8 trillion, in AuM (assets under management), driven by exploding flows in North American markets and huge investor appetite for ESG products.
Contributing to this important milestone were ETFs listed in North America which witnessed historic flows of $95 billion over February, an almost 50% increase month-on-month. There are now 3,200 ETFs listed on North American exchanges with $5.9 billion in AuM.
ESG ETFs, which nearly tripled assets in 2020, saw flows of $19 Billion (9%) over February to reach a new high of $210 billion in AuM, making February the largest single-month in history in terms of ESG ETF flows.
ETFs – exchange traded funds – are very low cost funds that track an index and can be traded just like normal shares. They are becoming more favoured in Europe by large investors like pension funds. Traditionally tracking stock market indexes, today they provide investors with access to a wide range of asset classes.
Purpose Investments perfectly times Bitcoin launch
With fortuitous timing, the first Bitcoin ETF was launched in North America in February by Purpose Investments. During the month, Bitcoin ETFs saw record-shattering growth with nearly $250m in new flows. $4.5 billion of assets now track Bitcoin through an ETF- a small but growing portion of its $1 trillion market capitalization.
In contrast, Gold ETFs lost their lustre over February as flows went negative, losing $5 Billion for a total of $186 Billion of AuM.
“The flexibility of the ETF wrapper means that an ever-increasing range of ideas, from actively managed strategies to ESG and thematic investments like disruptive tech and Bitcoin, are now easily available to all investors, and many are taking the opportunity to gain exposure to asset classes and strategies that were previously unavailable to them,” said Anaelle Ubaldino, Head of ETF Research at TrackInsight. “However, the proliferation of choices, not just in areas like ESG or Bitcoin, but across ETFs in general means investors are faced with a paradox of choice. So investors must do their homework and look beyond the headlines and media hype when picking an ETF as products that are similar on the surface may be very different when you look under the hood.”
Cannabis ETFs continued to dominate performance with seven of the top 10 best-performing funds of the year targeting this nascent sector. Among the leaders YTD to end February were Amplify ETF TR Seymour Cannabis (+70.97%), Global X Cannabis (+64.54%) and Horizons Marijuana Life Sciences Index ETF (+62.39%).