State Street Global Advisors, the third-largest supplier of ETFs in the world by assets, has seen a more dramatic decline. ETF inflows for State Street fell by 80% to just US$8.8 billion.
After a decade of great gains for equity markets that accelerated asset growth, the sudden decline in risk-taking among investors this year has added a new dimension to competitive pressures throughout the ETF business.
Financial advisors and wealth managers frequently utilize US sector ETFs to place tactical wagers, according to Matthew Bartolini, head of SPDR Americas research at State Street Global Advisors. This de-risking by investors is especially noticeable in these ETFs.
In the first half of the year, ETFs connected to defensive industries saw favorable inflows since their earnings are thought to be less susceptible to a slowdown or recession.
Consumer staples ETFs brought in US$5.6 billion, utilities ETFs US$2.5 billion, and healthcare sector ETFs US$9.1 billion in new investments.
