Our monthly ‘ETF 20/20’ report briefly summarizes recent Exchange Traded Fund (ETF) trends globally. It uses data from the First Bridge ETF database that includes all global ETPs.
- Global ETF assets were $5.085T as of May 31, 2018.
- As of May 31, 2018, MSCI began to include China ‘A’ shares in its emerging markets index that is tracked by large ETFs like the iShares Emerging Markets ETF (‘EEM’).
- Schwab published its annual ETF investor study, which showed that 91% of ‘millennial’ investors (currently aged 25 – 37) consider ETFs as their investment vehicle of choice.
- There were 152 new ETF listings globally in May 2018.
- US small caps (‘IWM’; 5.3%) significantly outperformed US large caps (‘SPY’; 2.8%) in the trailing 1-month through June 14, 2018.
- In the US large cap equity space, growth outperformed other popular ‘smart beta’ strategies like value and low volatility in the trailing 1-month through June 14, 2018.
First Bridge provides ETF data and analytics to reputed institutional clients. Our ETF data sets include daily ETF holdings, global ETF product & smart beta classifications, historical distributions and risk metrics. Our clients include asset managers, financial software providers and research firms that use ETF data as a critical input into their systems & workflow. We often provide ‘high touch’ services to our clients in the form of ETF data sets customized to their needs with related support. The First Bridge team combines deep expertise in the Indexing & ETF domain with skills in statistical programming and data visualization.
Phone: (650) 762-9270
Global ETPs: Landscape Snapshot
Global ETF assets were $5.085T as of May 31, 2018. The table below provides a detailed breakdown by ETF category, and is a summary from the First Bridge ETF data and analytics platform.
ETF / ETP Type
Assets ($M) - May '18
Assets ($M) - Apr '18
1.1 Broad Market
1.4 Treasury / Sovereign
1.5 Inflation Protected
1.6 Specialty / Other
- Commodities & Metals
2.1 Diversified Commodities
2.4 Gold & Metals
- US Equity Exposure
3.1 Broad Market & Size
3.2 Dividend & Fundamental
3.3 Factor & Thematic
3.4 Sector & Industry
3.5 Growth / Value
3.6 Quant Strategy & Other
- Global/Ex-US Equity Exposure
4.1 Broad Market & Regional
4.2 Country Specific
4.3 Dividend & Fundamental
4.4 Factor & Thematic
4.5 Sector & Industry
4.6 Quant Strategy & Other
- Multi-Asset & Other
- Inverse / Leveraged
- ETP Listed in Israel*
All Globally Listed ETPs
Source: First Bridge Data and individual ETF Sponsors; ETF data as of May 31, 2018
* The Global Equities category includes both International (ex-US) and Global (US + International)
** Asset breakdown by exposure type not available for ETFs listed in Israel
Key ETF Related Developments
1. Inclusion of ‘A’ Shares in EEM became effective as of May 31, 2018
As of May 31, 2018, MSCI began to include China ‘A’ shares in its emerging markets index that is mirrored in the daily ETF holdings of large ETFs like the iShares Emerging Markets ETF (‘EEM’). China ‘A’ shares are stocks of firms that are incorporated and listed in China and trade in Renminbi. Historically these shares have been excluded from major indices since non-Chinese institutional investors did not have access to them, except through restricted QFII schemes.
A year ago MSCI announced that it would begin to include China ‘A’ Shares in its indices from June 2018, due to their increased accessibility through the Stock Connect program. In order to avoid drastic changes to indices, these stocks are subject to a 5% inclusion factor i.e. the stocks are weighted in the MSCI emerging markets index in proportion to 5% of their eligible market cap rather than their entire market cap. Also, only 30% of their market cap is eligible, since ‘A’ shares have a 30% limit on foreign ownership. Therefore, each ‘A’ share gets an index weight in proportion to 1.5% (i.e. 5% of 30%) of its total market capitalization. This change is being introduced in two stages – the index inclusion factor was set at 2.5% in the just completed May 2018 rebalance, and will be raised to the target 5% in the August 2018 quarterly rebalance.
After the May implementation, China ‘A’ shares account for approximately 0.73% of the MSCI emerging markets Index. An increase in the index inclusion factor in the future could change the characteristics of the EM index. China ‘A’ Shares are more weighted towards sectors like healthcare and consumer staples that are driven by domestic Chinese demand relative to offshore China stocks that are more technology oriented.
2. Schwab’s annual ETF investor study emphasizes adoption by millennials
Schwab published its annual ETF investor study and this year’s edition placed an emphasis on the adoption of ETFs by millennials. Some of their findings are summarized below:
- 91% of ‘millennial’ investors (currently aged 25 – 37) consider ETFs as their investment vehicle of choice. This is relative to 54% for ‘baby boomers’ (currently aged 54 - 72) and 30% for ‘matures’ (aged 73+).
- 32% of the total investors surveyed by Schwab have replaced individual securities with ETFs. Here too, the replacement rate was higher for millennials (56%) compared to 10% for boomers and 8% for matures.
- 73% of the investors surveyed by Schwab indicated that they intend to look at ‘smart beta’ ETFs during periods of market volatility.
- 38% of millennials use either a fully automated robo advisor or portfolio building tool to invest, rather than investing with an advisor or by themselves. This trend is also likely to boost ETF demand in the future.
May 2018 ETF Launches – US
There were 16 new ETF listings in the US in May 2018. The new listings are summarized in the table below (this is a subset of our complete, regularly updated ETF list).
Table: May 2018 ETF Launches in the US
Type of Exposure
Industrial Real Estate
Real Estate - Data & Infrastructure Firms
Retail Real Estate
High Beta US Equities
Global or Ex-US Equities
Europe Large Cap 2x Leveraged - ETN
AI & Big Data Theme
Cryptocurrency & Blockchain - Active
Other Asset Types - Preferred Stock
U.S. Preferred Stock
Virtus ETF Solutions
Target Date / Multi-Asset
Commodities & Metals
Dynamic Commodity Strategy
US Commodity Funds
Bonds issued by S&P 500 firms
Inflation Hedged Corporate Bond
Short Duration Bonds - Active
High Yield Corporate Bonds - Active
International Aggregate Bonds - Active
ETF List: http://www.firstbridgedata.com; Data as of May 31, 2018
May 2018 ETF Listings – International (Ex-US)
There were 136 new ETF listings outside the US in May 2018 including cross-listings and share class variants.
Chart: May 2018 New ETF Listings by Region (outside US); Total = 136
Chart: May 2018 New ETF Listings by Type of Exposure (outside US); Total = 136
ETF Data Source: www.firstbridgedata.com; As of May 31, 2018
Performance of Key Asset Classes & Strategies
US small caps (‘IWM’; 5.3%) significantly outperformed US large caps (‘SPY’; 2.8%) in the trailing 1-month through June 14, 2018. Small caps are less impacted by trade wars or an appreciating dollar, and benefit from consumer confidence and employment gains in the US.
In the US large cap equity space, growth outperformed other popular ‘smart beta’ strategies like value and low volatility in the trailing 1 month through June 14, 2018.
Data source: First Bridge Data (http://www.firstbridgedata.com); Data as of June 14, 2018
More First Bridge ETF Resources
First Bridge maintains granular data sets for all globally listed ETFs, with key metrics. For more information, email: email@example.com
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