GLOBAL - Worldwide ETF assets under management have fallen by 19.3% this year, according to a report from Barclays Global Investors.
It said: "In the first ten months of 2008 we have seen investors move assets into ETFs providing exposure to fixed income and commodity indices while the assets in ETFs tracking equity indices especially global (ex US) and emerging market indices have declined.
"Stocks suffered their worst ever monthly losses in many markets in October. The S&P 500 fell the most in a single month since the crash of 1987. The Nikkei 225 fell 24% - the worst in its 58 year history. Many investors are afraid to take action and are sitting on higher than average cash balances."
BGI said investors who were expressing concerns over counterparty risk, transparency and liquidity when using structured products, swaps, certificates, and notes were showing a preference for ETFs where the structure was a fund, and often, more specifically, for ETFs which invested exclusively in-specie in securities.
It also reported that October saw the largest number of managers close their ETFs, with Santander, Bear Stearns and FocusShares closing their ETF businesses. Year to date, there have been 53 ETF closures, however, overall the number of ETFs has increased by 28% with 381 new launches.
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