According to a report compiled by Charles Schwab, the discount brokerage is the largest custodian of exchange traded fund (ETF) assets. But that’s not the only noteworthy thing uncovered in the report, which can be viewed here.
ETF assets custodied at Schwab rose to $100 billion – up a whopping 30% in the last year and 14% in the last quarter. What’s particularly interesting is the growth in retail investor assets, which surged 57%. Retail investor assets now account for 37% of the total at Schwab, putting to rest any questions about whether retail investors are as significant a market as the institutional one. [DIY Investors Dig ETFs.]
“The real ‘ah-ha’ for us is growth among individual investors,” says Beth Flynn, vice president of the ETF Platform at Schwab. “We’ve always known RIAs use ETFs quite a lot, but, as you can see…that’s shifted.”
In fact, retail investors represent a huge chunk of Schwab clientele:
- 44% of retail traders at Schwab own ETFs
- 15% of retail investors own them
- 37% of RIAs own ETFs
In terms of client flows over the last year:
- U.S. Fixed-income took in the bulk of the flows in the last year, accounting for 29% of the total. This has been driven by RIA clients, which accounted for 56% of the total.
- Retail investors have gravitated toward domestic and international equities; they account for 66% of U.S. equity usage and 53% of international usage.
Retail usage of ETFs should continue to grow, based on what’s been happening this year. When Schwab’s first snapshot was released at the end of Q2, retail usage was at 14%; in the most recent report, it’s moved up to 15%. [Online ETF Brokers Luring Investors.]
The report comes from Schwab’s ETF Platform Team, which was started in June.