The exchange traded fund industry has kept attracting investor interest and assets throughout the year, expanding to 1,176 listed products with $1.049 trillion assets as of the end of November. The investment vehicle is expected to continue to draw money away from other traditional investments in 2012, according to an S&P Capital IQ.
“In the year ahead, we expect that ETFs will continue to gain market share from mutual funds and individual securities, reflecting greater investor awareness of ETFs as an investment choice, and appreciation of prospective advantages that ETFs offer,” Tom Graves, CFA, S&P Capital IQ analyst, said in a note this week. “We think that growth in the ETF market adds to pressure on mutual fund companies and other financial service companies to offer ETF products.”
However, weakness in the equities market and skittishness over the Eurozone debt crisis caused net outflows in ETFs last month. Total ETF assets dropped $17 billion, or 1.6%, month-over-month. Equity-based ETFs make up 70% of total ETF assets. U.S. equity ETFs saw net inflows of $34.5 billion in the first 11 months of 2011, compared to $17.5 billion for the same period year-over-year, according to S&P.
The top 10 ETFs made up 36% of total ETF assets, led by SPDR S&P 500 ETF (NYSEArca: SPY) with $86 billion and SPDR Gold Shares (NYSEArca: GLD) with $73 billion.
As of the end of November, the top three ETF providers had a combined market share of around 84%, with BlackRock (NYSE: BLK) at 42%, State Street Global Adviosrs at 25% and Vanguard at 17%.