20 Dec 2010
Assets in US-listed exchange traded funds and exchange traded products broke through the $1 trillion milestone – reaching $1.027 trillion -- for the first time on 16 December 2010, according to BlackRock’s Global ETF Research and Implementation Strategy Team.
As of 16 December 2010, in the US, there were 894 ETFs with assets of $887.2 billion from 28 providers on two exchanges. At the end of December 2009 the US ETF industry had 772 ETFs, assets of $705.5 billion, from 29 providers on two exchanges. Year to date, 171 new ETFs have been launched in the US with another 828 new ETFs in the pipeline, while 49 ETFs were delisted.
Additionally, as of 16 December 2010, there were 185 ETPs listed in the US with assets of $115.5 billion, from 20 providers on one exchange. At the end of December 2009, there were 142 ETPs with assets of $88.1 billion from 17 providers on one exchange.
Growth in the US.market for ETFs and ETPs reflects expansion in the use of the vehicle through retail channels, as well as their continuing popularity among institutional investors of all kinds, said Deborah Fuhr, Global Head of ETF Research and Implementation Strategy at BlackRock.
Net new asset flows for US-listed ETFs for 2010 to date provide evidence of growing interest in both developed and emerging markets equity ETFs/ETPs, with these flows greater this year than in 2009, Fuhr said. At the same time, net new asset flows indicate less focus on fixed income and commodities.
Through November, net new flows into North American equity ETFs/ETPs have totaled $21 billion, compared with just $2 billion in 2009. Over the same time period this year, flows into emerging markets equity ETFs/ETPs overall have totaled $29 billion, compared with $27 billion last year. Of this total, flows into “multi-region” emerging markets products have totaled $26 billion year to date, compared with $16.7 billion last year.
Flows into fixed income products have totaled $31.2 billion, compared with $44.8 billion last year, and flows into commodity products have totaled $11.4 billion, compared with $32.6 billion last year.
Through November, the ETF average daily trading volume in US dollars has increased by 26 percent, to US $57.7 billion. ETF trading volume in November accounted for 24.1% of all United States equity turnover.
Growth in the utilization of ETFs and ETPs – as well as the expanding diversity of the product set – is leading to greater urgency of a market wide educational need, Ms. Fuhr said.
As of 16 December 2010, in the US, there were 894 ETFs with assets of $887.2 billion from 28 providers on two exchanges. At the end of December 2009 the US ETF industry had 772 ETFs, assets of $705.5 billion, from 29 providers on two exchanges. Year to date, 171 new ETFs have been launched in the US with another 828 new ETFs in the pipeline, while 49 ETFs were delisted.
Additionally, as of 16 December 2010, there were 185 ETPs listed in the US with assets of $115.5 billion, from 20 providers on one exchange. At the end of December 2009, there were 142 ETPs with assets of $88.1 billion from 17 providers on one exchange.
Growth in the US.market for ETFs and ETPs reflects expansion in the use of the vehicle through retail channels, as well as their continuing popularity among institutional investors of all kinds, said Deborah Fuhr, Global Head of ETF Research and Implementation Strategy at BlackRock.
“Increasingly both retail and institutional investors are building global, multi-asset portfolios that are designed to capture the performance of key ‘benchmarks’ for attractive market sectors -- an application for which ETFs and ETPs are particularly well suited,” Fuhr said.
“ETF providers are expanding their product ranges into more specialized areas to cater to the growing number of professional and retail investors using ETFs as advanced portfolio construction tools,” she said. “The increasing availability of these highly-specialized ETFs and ETPs across the full spectrum of equities, fixed-income and alternative investments means that investors can use these vehicles to instantly deploy capital to take advantage of new investment opportunities – with complete transparency into the underlying investments as well as low cost.
“Cost features make ETFs and ETPs among the most ‘democratic’ of investments, as a product’s pricing is consistent regardless of the type of investor or level of assets invested,” she said.
Net new asset flows for US-listed ETFs for 2010 to date provide evidence of growing interest in both developed and emerging markets equity ETFs/ETPs, with these flows greater this year than in 2009, Fuhr said. At the same time, net new asset flows indicate less focus on fixed income and commodities.
Through November, net new flows into North American equity ETFs/ETPs have totaled $21 billion, compared with just $2 billion in 2009. Over the same time period this year, flows into emerging markets equity ETFs/ETPs overall have totaled $29 billion, compared with $27 billion last year. Of this total, flows into “multi-region” emerging markets products have totaled $26 billion year to date, compared with $16.7 billion last year.
Flows into fixed income products have totaled $31.2 billion, compared with $44.8 billion last year, and flows into commodity products have totaled $11.4 billion, compared with $32.6 billion last year.
Through November, the ETF average daily trading volume in US dollars has increased by 26 percent, to US $57.7 billion. ETF trading volume in November accounted for 24.1% of all United States equity turnover.
Growth in the utilization of ETFs and ETPs – as well as the expanding diversity of the product set – is leading to greater urgency of a market wide educational need, Ms. Fuhr said.
“Investors need to understand that under the overall ETF/ETP umbrella, many different product structures, underlying investments (securities, futures, physical commodities, etc.), regulatory regimes and tax treatments are represented,” she said. “Within the ‘gold’ category, for example, an investor can find funds and notes based on physical gold, gold futures, gold mining stocks – each with quite different performance, regulatory and tax implications.
“As market growth and product innovation proceeds, it will become only more essential for investors of all kinds to deeply understand the full range of ETF and ETP structures, benchmarks, underlying features and applications, if they are to most effectively realize all the many potential benefits of the ETF/ETP approach,” she said.
