ETF Trends
ETF Trends

The exchange traded fund (ETF) industry is gaining popularity both in the states and abroad, and a recent industry review has shown just how much ground ETFs have covered.

The characteristics of ETFs are hard to ignore for any savvy investor. ETFs have two forms of liquidity: First, through shares on a secondary basis on an exchange. Second, through a primary basis via an unique creation process, according to iShares. ETFs are also traded at or close to their underlying net asset values (NAV). But it should be noted that divergence in performance of an ETF to its benchmark is possible.

In a recent review of the ETF industry by Barclays Global Investors, the overall picture of the ETF industry shows:

Worldwide:

  • By the end of the first quarter of 2009, the global ETF industry had 1,635 ETFs with 2,857 listings, $633.55 billion in assets and 87 providers on 43 exchanges globally.
  • Assets diminished by 10.9% year-to-date.
  • ETFs increased by 2.8% with 66 newly launched ETFs, and 25 ETFs were decommissioned.
  • Average daily trading volume increased 10.4% to $88.8 billion year-to-date.
  • iShares has 369 ETFs with assets of $296.8 billion, or 46.8% market share. State Street Global Advisors has 102 ETFs with $103.5 billion in assets, or 16.3% market share. Vanguard has 38 ETFs with assets of $44.2 billion, or 7.0% market share.
  • 732 new ETFs are in the works.
  • Net sales of ETFs were $2.8 billion during the first two months of 2009 compared to $117.4 billion in sales for mutual funds.
  • There are a total of 1,911 products with assets of $706.14 billion from 104 providers on 45 exchanges globally.

United States:

  • At the end of the first quarter of 2009, the U.S. ETF industry had 690 ETFs with assets of $430.15 billion and 18 providers on three exchanges.
  • Assets fell 13.5% year-to-date.
  • The number of available ETFs decreased by 1.1%, with 15 newly launched ETFs, and 23 ETFs that were decomissioned.
  • Average daily trading volume increased 10.2% to $84.9 billion year-to-date.
  • Net sales of ETFs in the United States were down $7.1 billion in the first two months of 2009 compared to $47.0 billion for mutual funds.
  • There are a total of 829 products with assets of $491.28 billion from 32 providers on three exchanges (this figure includes exchange traded notes (ETNs)).
  • It has also been shown that for non-U.S. equity funds, indexes outperformed a majority of actively managed non-U.S. equity funds in the last five years.

Max Chen contributed to this article.

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.