Deutsche Bank’s Exchange Traded Fund platform, db x-trackers, has said its net inflows for 2008 represent a year-on-year growth in assets under management of 132 per cent, confirming that despite the unprecedented turmoil seen in the markets last year investor demand for ETFs continues to grow exponentially.

In a statement, db x-traders announced net inflows of over €12 billion ($15.8 billion) during 2008, of which equity ETFs represented €6.77 billion and fixed income ETFs €5.24 billion.

Deutsche Bank reports that in December 2008 alone db x-trackers saw a net inflow of €2.6 billion, mostly in its equity ETFs.  These inflows were assisted by German tax reforms which meant that if German investors invested before the end of December any future gains would be tax-free.  But investment into ETFs shows no sign of slowing down.

ETFs are widely held to be on course for massive growth in the next few years as they continue to find favour as a low-cost investment vehicle.  In the wealth management sector, they are used for reasons such as tactical asset allocation and the management of discretionary portfolios.

According to a report by Barclays Global Investors, which operates iShares, the world’s largest ETF brand, ETF assets will reach $1 trillion in 2009. 

Furthermore, BGI predicts that assets held by exchange traded funds will reach $2 trillion by 2011.  To put this figure into context, ETFs held $17.6 billion of assets in 1998.

“During the four first trading days of 2009 over €1 billion was invested in db x-trackers' ETFs”, said Thorsten Michalik, head of db x-trackers at Deutsche Bank, “2009 will be the year of the ETF.”

The growth of db x-trackers’ assets under management is matched by plans for the platform’s international expansion.  “We are planning to expand our product line in the UK and internationally.  In February db x-trackers will list in Asia for the first time, gaining exposure for our ETFs in a new market,” said Mr Michalik.

Launched in January 2007, db x-trackers currently manages assets totalling €18.6 billion, offering over 90 ETFs across various asset classes.  The platform’s ETFs are domiciled in Luxembourg and are listed on the stock exchanges of Frankfurt, London, Zurich, Paris and Milan.

According to data published by BGI in November last year, iShares is Europe’s biggest ETF brand, accounting for $55.8 billion of assets, or 38.4 per cent of the total, followed by Lyxor Asset Management – part of French bank Société Genérale – at $35.15 billion, or 24.2 per cent of the total.