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Cerulli: Emerging Markets, Commodities Top New ETF Product Plans

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Emerging markets equities and commodities comprise the new product plans of 6 in 10 sponsors of exchange-traded funds, new research reveals.

Cerulli Associates, Boston, published this finding in the April 2012 edition of “The Cerulli Edge: U.S. Monthly Product Trends.”  The publication is one of several periodicals that inform Cerulli clients about issues and trends in asset management and distribution.

According to the survey, U.S. equity, international (excluding emerging markets) equity account for the new product plans of, respectively, 53% and 47% of ETF sponsors. U.S. taxable bonds, currency and other alternatives (e.g., alternative allocation, managed futures) make up the new product plans of one-third ETS sponsors.

Other new ETFs of plan sponsors by investment strategy include international bond (27%, excluding emerging markets), real estate (27%), single-country equity (27%), emerging markets bond (20%), sector-specific (20%), global equity (20%), allocation (13%), global bond (13%), inverse or leverage (7%) and hedge fund replication (7%).

The Cerulli report observes that both mutual fund and ETF assets increased in March, but at lower rates than in February. First quarter assets in mutual funds and ETFs grew 9.7% and 14%, respectively.

ETF and mutual funds assets totaled $1.193 trillion and $8.733 trillion, respectively, at the end of March. This compares with $1.186 trillion and $8.650 trillion, respectively, at the close of February. ETF flows slowed in March, but remained positive ($12.4 billion), garnering $53.1 billion for the quarter.

Total ETF assets increased 14% in the first quarter as international stocks funds led growth with 18.6%. Despite U.S. stock funds shedding $8.3 billion in flows during the month, the U.S. stock ETF asset class earned more than $7 billion in March, Cerulli says.

U.S. stocks accounted for 42.4% of mutual funds by asset class in March. This compares with taxable bonds at 25.1%, international stocks (15.2%), balanced funds (9.5%), municipal bonds (6.1%), alternatives (1.1%) and commodities (0.6%).