Weakening equity valuations have hit assets under management for U.S. exchange-traded funds, but interest in ETFs continues to grow, SSgA said today in a new report.
Assets in U.S. ETFs totaled $575 billion as of June 30, down 5.4% from the start of the year. The number of outstanding ETF shares, however, increased 9% during the same period, according to SSgAs 2008 Mid-Year Exchange Traded Fund Report.
Other trends in the first half of 2008 include an increased interest in TIPS and commodity ETFs, up 39% and 34%, respectively, as investors look for a hedge against inflation.
In the first half of 2008, 87 new ETFs were launched, down nearly 50% compared to the first half of 2007. The weak equity markets could have played a role in the slowed rate of introductions, said Tom Anderson, head of ETF strategy and research at State Street. Also, 57 exchange-traded notes were launched in the first six months of the year, making a total of 144 exchange-traded products issued, down 13% from the same period last year, according to the report.