Exchanged traded funds reached a major milestone on Dec. 9 when assets under management in the U.S. topped $1 trillion for the first time. The indexed-based funds continue to see inflows increase even as other asset classes have seen investors pull back contributions in the face of market volatility.
ETFs are index-based funds that trade like stocks, and exchange-traded products (ETPs) include tradable products built around trusts, partnerships, commodity pools and notes. The roughly 1,100 U.S.-based ETFs and ETPs totaled $1.027 trillion in assets on Thursday, according to Blackrock Global ETF Research. At the end of December 2009, U.S. ETF assets totaled $793.6 billion. By contrast, the mutual fund industry had assets of $11.12 trillion at the end of 2009 according to the Investment Company Institute.
Laura Morrison, head of U.S. ETF trading and listings at NYSE Euronext says passing this asset milestone in 2010 bodes well for the industry going into next year (see video). Says Morrison: "The ability to be able to expand and grow and launch ETFs worldwide has definitely been a focus of our issuers and focus of exchanges around the world."
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