ETF assets rise despite Brexit fears

Assets invested in exchange-traded funds (ETFs) and exchange-traded products (ETPs) listed globally have soared to a record high of $5.12 trillion (€4.5 trillion).

July saw net inflows of $41 billion – the highest level since January, when the industry raked in $106 billion, according to data provider and consultancy firm ETFGI. July was also the 54th month in a row of net inflows into ETFs/ETPs listed globally.

ETFGI founder Deborah Fuhr said: “Investors favoured equities over fixed income and commodities as equity markets have performed positively in July.”

She added that Brexit was a concern for some market participants. The next round of UK negotiations with Brussels resumes on August 16 and 17 and British Prime Minister Theresa May is under pressure to clinch a divorce deal with the European Union ahead of the October deadline. Earlier this month, the UK-based Institute of Directors (IoD) warned “firms had been left in the dark” in terms of knowing what to plan for and when.

The business group called on the government to provide greater clarity in the event of a no-deal scenario. “Trade associations like the IoD are doing their best to fill the information void, but the reality is that many companies feel they can only make changes once there is tangible information about what they are adjusting to,” said IoD director-general, Stephen Martin.

“As long as no deal remains a possibility, it is essential that the government steps up to the plate and provides advice on preparing for such an outcome.”

©2018 funds europe

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