Global exchange traded funds attracted record inflows in 2011, but with the popularity of the investment vehicle rising, greater regulatory scrutiny is being placed on ETFs, according to a report.
Deutsche Bank (NYSE: DB) calculated that global ETFs brought in $163.8 billion last year, a little higher than the $163 billion in 2010, reports Chris Flood for the Financial Times.
Christos Costandinides, European head of ETF research and strategy at Deutsche Bank, projects new inflows for 2012 to be somewhere between $137 billion and $190 billion, pushing overall ETF assets up 15% to 20% this year.
Overall, ETFs continued to show stronger inflows than mutual funds in 2011. As of November, U.S.-listed ETFs brought in $95.2 billion, where as U.S. mutual funds attracted $33.6 billion.
However, uncertainty in both the U.S. and European markets could slow the drive in equities while gold ETFs may lose assets if the gold outlook weakens, Deutsche Bank warned.
The growing popularity of ETFs has also drawn more focused scrutiny from regulators and market watchdogs. For instance, the European Securities and Markets Authority will be publishing new guidelines for ETFs in Europe by the end of January. Meanwhile, the Financial Stability Board, Bank of Itnernational Settlements and International Organization of Securities Commissions are also looking at ETFs and their potential for systemic risks.
“What started as the ‘ETF debate’ now revolves around preparing the asset management industry to successfully meet the challenges of the future, by increasing transparency and efficiency to follow in the footsteps of the ETF industry,” Costandinides said in the article.
For more information on ETF performance, visit our ETF Performance Reports category or take a look at our ETF Analyzer for more up-to-date numbers.
Max Chen contributed to this article.