February 7, 2011

Schwab's ETF Assets Grew 34% in Q4 2010

In retail-investor accounts, the level of exchange-traded funds has grown 61% to $41 billion

As of the fourth quarter 2010, retail traders, retail investors and RIA clients working with Charles Schwab had over $110 billion in ETF assets.

That represents a year-over-year increase of 34% vs. 28% growth in the ETF industry, according to Schwab.

As of Dec. 31, 2010, Schwab had total assets of $1.57 trillion, which grew at a compound rate of 8% over the past decade.  Thus, ETF assets represent about 7% of total assets custodied at the San Francisco-based discount broker.

 But retail-investor ETF assets have grown 61% over the past year and now account for 37% of total ETF assets at Schwab, or $41 billion.  

RIA-based ETF assets grew 20% between the fourth quarter of 2009 and 2010, while ETF assets in retail-trader accounts expanded 29%. About 51% of total ETF assets custodied at Schwab, or $56 billion, are in RIA-client accounts and 12%, or $14 billion, in retail-trader accounts.

Q4 2010 ETF flows were driven by RIAs and retail investors, particularly into equity and sector ETFs, the company says.

The largest ETF asset class exposure by RIAs is U.S. equity ETFs, with 40% of assets allocated there; the second-largest class is international equity with 22% of RIA assets.

The percent of assets held by RIA clients in ETFs varies from a low of 7% for RIAs with $1 billion or more of assets custodied at Schwab to 11% for clients of RIA with less than $25 million in assets at Schwab.

At the end of the third quarter 2010, some $100 billion in ETF assets were held by Schwab clients. This figure was up 30% year over year and 14% over the second quarter.

Of the $100 billion in ETF assets held by Schwab clients, about 51% were in RIA-client accounts, 37% in retail-investor accounts and 12% in retail-trader accounts.

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