Sure, mutual funds might hold most of the investment assets, but exchange traded funds (ETFs) are surpassing them in growth. Mutual funds shouldn’t wave the white flag yet, though: Sue Asci for Investment News reports that the industry is hardly in jeopardy.
As of Oct. 31, mutual fund assets had grown to $8.2 trillion. That’s more than double the $3.6 trillion in assets they held in 2002. Net inflows through Oct. 31 were $233.2 billion. Those numbers are from the Financial Research Corp. of Boston.
While that sounds great, check this out: ETF assets have grown nearly fivefold in that same period, to about $590 billion. Year-to-date inflows are $94 billion, which is a 73.8% increase from Oct. 31, 2006.
Analysts say that it’s easier for ETFs to have so much growth, because they’re coming off a smaller base. Mutual funds are so big and have been around for so long that maintaining that kind of growth would be difficult.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.