Exchange traded funds (ETFs) have seen growth slow over the past three months. During this period, assets under management globally shrank by a substantial amount.
Phil Craig for the Wall Street Journal reported that at the end of July, assets under management in ETFs had fallen to $786 billion from $805 billion in April, down 2.4% during this time.
These numbers will surely have to grow if ETFs are going to even come close to maintaining growth from the previous two years. Total ETF assets grew 41% in 2007 and 37% in 2006. Unless investing increases to a significant degree, 2008 is likely to see slower growth or potentially negative growth in assets under management.
Another negative for ETFs is pointed out by David Hoffman of InvestmentNews. He reports that the first half of 2008 was scarred with an increase in ETF closings, as 11 ETFs provided by Claymore Securities and 5 ETFs from Ameristock Corp were liquidated due to slow asset growth.