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Q3 ETF Assets Up 7.2% From Year Ago: Broadridge

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Exchange-traded fund assets grew by $144 billion, or 7.4%, in the year ended Sept. 30, Broadridge Financial Solutions reported Thursday.

During the same period, long-term mutual fund assets from third-party distributors declined by $156 billion, or 2%.

ETF assets across institutional and retail channels reached $2.1 trillion, while those of long-term mutual funds rose to $7.2 trillion.

Broadridge reported that retail channels, representing 63% of all ETF assets, drove the growth over the past year to Sept. 30, increasing by $150 billion, while institutional channels decreased by $6 billion.

RIAs led all retail channels, adding $46 billion in ETF assets. Wirehouses followed with $45 billion, and independent broker-dealers with $41 billion.

Over this period, long-term funds from retail channels were down by $199 billion, getting a boost only from the RIA channel, which added $29 billion. Assets from the institutional channels were up $43 billion.

“ETF assets continued year-on-year growth through the third-quarter, despite the worst stock market drop since 2008, with advisors accounting for the lion’s share of investment,” Frank Polefrone, senior vice president of Broadridge’s Access Data product suite, said in a statement. 

“This trend demonstrates the increased use of passive products. RIAs, which hold a higher percentage of passively managed funds, were the only retail channel with an increase of long-term fund assets over the last year.”

The report said retail channels increased assets across several ETF global product categories, as defined by Morningstar:

  • Fixed income, 23%
  • Allocation funds, 22%
  • Equity, 11%
  • Alternative, 5%

Assets held by the retail channels in two ETF categories declined: commodities by 18%, and convertibles by 9%.

In contrast, all global product categories for long-term funds showed a decrease in assets over this same period.  

— Check out ETFs: 4 Things Advisors Should Know Before Buying on ThinkAdvisor.