The Individual Investor’s Guide to Exchange-Traded Funds 2012
The exchange-traded fund (ETF) industry continues to expand, though the rate of growth has slowed. Net assets controlled by ETFs totaled a record $1.163 trillion as of June 30, 2012. Though a large number, it represents just a 7.8% increase from 12 months prior.
As you can see in Table 1, the percentage increase was the smallest since the 12-month period ended June 30, 2009. In terms of absolute dollar growth, the industry experienced the second-smallest mid-year 12-month increase since June 30, 2005.
In this article
- Impacts on Growth
- Actively Managed ETFs
- A New Performance Statistic
- A Warning About ETNs
- How to Use This Guide
- Which Funds Were Included
- Ultra and Contra ETFs
- A Key to Terms and Statistics
- Exchange-Traded Fund Categories
- ETF & ETN Contact Information
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Impacts on Growth
Does this mean the industry is becoming mature? We think it is too early to tell. Volatile market conditions have impacted growth and certainly have played a role in keeping some investors skittish about allocating more money to equity investments. This sentiment would have limited growth in total assets. Fund families are continuing to introduce new exchange-traded products, a sign of continued growth. New to this year’s guide are more than 240 funds that were started after July 1, 2011. (Most of these new funds can be found in the online version of the guide, at AAII.com, as they were too small for inclusion in the print version.)
We also looked at the 25 largest exchange-traded funds to see if there was any consolidation at the top, which would be a sign of a maturing industry. The two largest funds, SPDR S&P 500 (SPY) and SPDR Gold Shares (GLD), did get larger with total assets increasing by 12.6% and 12.4%, respectively. Below those two, the data gets more mixed. Vanguard MSCI Emerging Markets ETF (VWO) grew by just 3.0%. iShares MSCI EAFE Index (EFA) and iShares MSCI Emerging Markets Index (EEM) saw their total assets decrease by 13.4% and 12.0% respectively. Some large funds did grow significantly, including iShares iBoxx $ Investment Grade Corporate Bond (LQD) and Vanguard Total Bond Market ETF (BND). The ninth and 11th largest funds saw their assets increase 64.7% and 69.8% over the past 12 months, respectively.
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