Mercado points out that index funds at 12.2% of the overall market is “virtually even” with ETFs for the first time.
Meanwhile, Deutsche Bank calculates that active mutual funds held $10.6 trillion with a market share of 76.2% at the end of 2013, down over 95% in 1998, as ETFs gain a greater following.
“We’re seeing most of the innovation in new styles and benchmarking strategies now coming in the form of ETFs rather than index mutual funds,” Vinder said.
Vanguard is witnessing higher demand for its ETFs. Joel Dickson, a senior investment strategist at Vanguard, attributes the growing demand from financial advisors and their clients to the industry’s shift away from charging commissions to a fee-based structure where investors pay fees on a percent of assets. Consequently, low-cost ETFs have become a very popular investment option among advisors. [Vanguard Keeps on Hauling in ETF Assets]
For more information on ETF fund flows, visit our ETF performance reports category.
Max Chen contributed to this article.