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%.
Among the largest ETFs available in the equities category, S&P Capital IQ holds an overweight ranking on SPY, PowerShares QQQ Trust (NYSEArca: QQQ), iShares S&P 500 Index Fund (NYSEArca: IVV), Vanguard Total Stock Market Index Fund (NYSEArca: VTI), iShares Russell 1000 Growth Index Fund (NYSEArca: IWF), iShares Russell 1000 Value Index Fund (NYSEArca: IWD) and SPDR Dow Jones Industrial Average ETF Trust (NYSEArca: DIA).
S&P provides an overweight ranking based on gross expense ratio, bid/ask spread, risk considerations, holdings-related metrics, ETF standard deviation – a measure of price volatility, among others.
For more information, visit our ETF Performance Reports category.
Max Chen contributed to this article.
Full disclosure: Tom Lydon’s clients own SPY and GLD.