Last year was another banner year of inflows to U.S.-listed exchange traded products as the U.S. ETF industry surpassed the $2 trillion in assets milestone. For the year, U.S. ETFs and ETNs hauled in a record $245.7 billion of new asset.
Charles Schwab (NYSE: SCHW), the largest discount broker, continues grabbing its fair share of ETF assets. For the year, ETF assets custodied at Schwab surged 18% to $231 billion, according to the firm’s fourth-quarter and 2014 snapshot released this week.
“ETF Flows at Schwab were $24.5B, up 7% over 2013. RIA Clients captured half of the 12-month ETF Flows, up from 2013, while Retail Traders and Retail Investors represented the other half ,” according to California-based Schwab.
Schwab issues 21 of its own ETFs, including four fixed income funds and six international equity funds. In 2014, investors allocated record assets to bond ETFs. The Schwab U.S. Aggregate Bond ETF (NYSEArca: SCHZ), which charges just 0.06% per year, has $1.2 billion in assets under management. [Low-Fee Bond ETFs]
Schwab noted that registered investment advisors (RIAs) drove a substantial portion of the inflows to corporate bond and intermediate-term bond ETFs.
Another prominent theme is investors’ increased use of sector and dividend ETFs. As of Dec. 26, there was $311.1 billion allocated to sector ETFs with energy ETFs accounting for $44.7 billion of that total, according to Bloomberg.
“There was a shift back to Sector ETFs, which represented 19% of flows, versus 7% in 2013. Real Estate was back in favor, accounting for nearly half of the Sector flows. Flows into all Sector categories were positive, except for Consumer Cyclical,” according to Schwab.