ETFs continue to attract larger inflows by magnitude compared to mutual funds, adding on $77 billion to the $1 trillion ETF industry in the first nine months of 2011, while mutual funds tacked on $91 billion to its $9 trillion long-term mutual fund industry, according to Morningstar.
“For the last four calendar years there’s been a broad-based trend toward index strategies, whether they be in mutual funds or ETFs,” Joel Dickson, senior investment strategist at Vanguard, said in the Ignites story. “Obviously there has been a growing adoption of ETFs within that segment, but that tends to be a part of the passive investment trend.”
“For the most part, where ETFs are a challenge to the mutual fund industry is in incremental growth opportunities,” said Loren Fox, senior research analyst at Strategic Insight, in the report.
For more information on ETFs, visit our ETF 101 category.
Max Chen contributed to this article.