The news about exchange-traded funds has been almost uniformly positive in 2013. Notwithstanding a slowdown in investor adoption of ETFs in Asia, as LifeHealthPro reported in September, demand for the vehicles has mostly been on the upswing.
One indicator of the market’s expansion is the rollout of passively managed ETFs, an outgrowth of rising investor demand for alternative vehicles that can help optimize the risk-adjusted performance of portfolios. More than eight in 10 sponsors of the products (86 percent) say they’re now developing passive ETFs.
If the latest research is any guide, those sponsors should find ready and willing buyers of ETFs — passive or otherwise. A new report from Cerulli Associates, “The Cerulli Edge: U.S. Monthly Product Trends,” reveals that ETF assets grew to $1.6 trillion from $1.5 trillion in October, representing a 4.8 percent increase, while attracting an additional $24.8 billion in net flows for the month.
Mutual fund assets in October also grew, rising to $10.7 trillion from $10.4 trillion, a 2 percent gain. Net new flows of mutual funds over the same period hit $18.3 billion, up substantially from $2.7 billion in September.