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January 10, 2013 at 01:28 PM
Exchange-traded fund flows reached $191 billion in 2012, Morningstar’s Michael Rawson reported on Jan. 4. Last year’s assets surpassed the previous record of $169 billion in 2008.
Much of that growth came in December when inflows were nearly $38 billion, Rawson said.
Rawson noted that in 2008, assets were flowing into U.S. stock ETFs, while last year, investors were putting their money in international, fixed-income and sector stock ETFs. As of December 2012, U.S. stock ETFs were at $478 billion in net assets. International stock ETFs had $292 billion and sector stocks had $184 billion.
Total assets in U.S. ETFs are now $1.35 trillion, and not counting money-market funds, ETFs make up 13% of total ETF and mutual fund assets.
Stong flows into fixed-income ETFs led total assets to double since 2008, Rawson said.
The top fund family was iShares, with $556 billion in assets under management, according to Morningstar. State Street Global Advisors followed with $329 billion in AUM, and Vanguard ranked third at $246 billion. PowerShares and Van Eck filled out the top five with $59 billion and $28 billion, respectively.
Rawson noted that iShares was second to Vanguard in fund flows for two years before taking over with 41% market share in 2012. Vanguard has steadily gained market share over the past five years to more than 18%, he said. While iShares’ market share is considerably higher than Vanguard’s, it has fallen from its 53% share five years ago. “In response, the firm launched a new strategy in October that centers on a “core” series of low-priced, portfolio building-block ETFs,” Rawson said. Although those core products account for less than 4% of the firm’s 280-fund lineup, they represent more than 25% of total net inflows.
As for individual funds, Rawson highlighted the SPDR S&P 500 ETF (SPY) and the PIMCO Total Return ETF (BOND). SPY brought in more new cash than any other fund, he said. “Due its hyperliquidity and the ability to trade SPY at low costs, traders tend to use it to rapidly place market bets, so flows into SPY are a good barometer of market sentiment,” Rawson said.
