GLOBAL – The global exchange traded fund (ETF) marketplace grew considerably in 2002 according to research by Morgan Stanley. Assets under management increased by 35% taking the total to 128 billion euros, and Europe is leading the way in terms of products available.
The Japanese ETF market saw the most growth in assets under management, increasing 218% in 2002 to 20 billion euros. The European market boasted a 91% increase in assets under management to 10 billion euros. Assets under management growth for the US was 21% to 98 billion euros.
The number of products also increased to 280 ETFs – the majority of which are European. Europe also saw the largest number of new product launches in 2002 with 47 - an increase of 66%, says Morgan Stanley.
According to the research, Europe boasts the largest number of ETF managers with 14. The US has six managers and Japan and Korea have four each.
As early as June the European ETF market had demonstrated significant growth, up 29% since the start of the year. Deborah Fuhr, vice president at Morgan Stanley in London, attributed the growth to continued market. “The Enron affair has left investors reluctant to back just one or two stocks within a sector. The rapid growth in the European ETF market is largely due to the introduction last year of broad sector ETFs that mean people can avoid stocks like Enron but still benefit from their underlying sector,” she said.
ETFs are securities that track indices but have the flexibility of trading like a stock.