The second quarter of 2018 saw a net issuance of roughly $55.83 billion, down from nearly $62.83 billion last period. The domestic equity ETF attracted substantial investor demand whereas the world equity ETF experienced net redemptions during this quarter.
The net equity ETF issuances for the second quarter were about $25.11 billion. The inflows were due to the high demand generated by the domestic equity ETF, since it had a value of $34.35 billion, up from approximately $3.29 billion last quarter. On the other hand, the world equity ETF saw an outflow of about $9.2 billion, as the demand steadily reduced for the ETF from January onwards, falling from a value of $25.9 billion in inflows to an outflow of 9.9 billion by June.
Net hybrid ETF issuance was 53% less than what is was in the first quarter, as it has been consistently reducing in demand since the start of the year as well.
Fixed Income ETFs had a net issuance of about $30.65 billion, with both the Taxable Bonds and Municipal Bonds increasing in demand when compared to the first quarter. Taxable Bonds ETF generated an inflow of approximately $28.69 billion (up 91% in demand from the previous period) and Municipal Bonds attracted an increase in demand of 186%, generating $1.96 billion.
Commodity ETFs suffered an outflow of $273 million, unlike the previous quarter where there was an inflow of $3.3 billion. The outflow is primarily due to the redemptions in the month of June, which outweighed the inflow of $2.3 billion in April.
Overall, there was a net issuance of ETFs with approximate value of $55.83 billion, being driven by the domestic equity ETF and Fixed Income ETF. Outflows were generated by the world equity and commodity ETF during this quarter.