ETF Trends publisher Tom Lydon just joined CNBC at the closing bell to talk about all the woes and joys that exchange traded funds experienced through 2016.
There are now 1,960 U.S.-listed exchange traded products with $2.550 trillion in net assets under management after the ETP industry attracted $283 billion in net inflows for the year.
Among the most popular ETFs, investors still threw billions into S&P 500-related offerings. For example, the SPDR S&P 500 ETF (NYSEArca: SPY) saw $24.4 billion in net inflows, iShares Core S&P 500 ETF (NYSEArca: IVV) attracted $13.5 billion and Vanguard 500 Index (NYSEArca: VOO) added $11.4 billion, according to XTF data. The S&P 500 ETFs saw heavy inflows over the past month, with SPY bringing in $15.4 billion, as investors looked to a pro-growth environment ahead under the new Donald Trump administration.
The PureFunds ISE Junior Silver ETF (NYSEArca: SILJ) and SPDR Metals & Mining ETF (NYSEArca: XME) were the best performing ETFs of 2016, rising 134% and 111% year-to-date.
On the other end among the worst performers, iPath S&P 500 VIX Short Term Futures ETN (NYSEArca: VXX) and VelocityShares Daily Long VIX Short-Term ETN (NYSEArca: VIIX) fell about 69%.
The most popular ETF launches of the year include the WisdomTree Dynamic Currency Hedged International Equity Fund (BATS: DDWM), which began trading in January 7, has $300.6 million in assets under management. The SPDR Gender Diversity Index ETF (NYSEArca: SHE), which began trading in March 7, has $273.8 in assets. Lastly, the First Trust Dorsey Wright Dynamic Focus 5 ETF (NasdaqGM: FVC), which began trading in March 17, accumulated $256.7 in assets.
Looking ahead, Lydon believes the appetite for ETFs will continue to increase, with 74% of financial advisors saying their investment vehicle of choice is ETFs. Actively managed ETFs and smart-beta ETFs will also attract more attention as bond and stocks grow long in the tooth.
Additionally, hedging strategies will also be especially attractive, Lydon added. For example, the ProShares Investment Grade-Interest Rate Hedged ETF (BATS: IGHG) provides long exposure to investment-grade debt but hedges against rising interest rates, and WisdomTree Dynamic Currency Hedged International Equity Fund (BATS: DDWM) follows international stocks while hedging currency risk.
Click to watch the full video segment – Closing Bell Exchange: ETFs has little bit for everyone in 2017.