Worldwide assets managed in ETFs by managers in Pensions & Investments annual survey rose 9.2% in 2011, to $1.278 trillion, far off the pace of the 36% growth in 2010.
Of that total, more than 95% is in sponsored, or proprietary, exchange-traded funds. (P&I did not ask for a breakout between assets in sponsored ETFs vs. non-proprietary ones for the year-earlier survey, but estimates those assets alone rose 9.5%, to $1.218 trillion.).
While overall asset growth slowed in 2011, exchange-traded funds still had slightly positive net inflows in the year, said Deborah Fuhr, a principal in the London-based ETF consulting firm ETFGI LLP. She said that is in contrast to mutual funds, which had net outflows in 2011.
Ms. Fuhr said the positive flows during a shaky economy is a positive sign for the long-term future of the ETF marketplace.
For this special report, P&I looked at the worldwide assets of firms in its universe of managers of U.S. institutional tax-exempt assets. The total ETF market worldwide amounts to $1.351 trillion, according to BlackRock Inc. data. ETF assets in P&I's universe make up 95% of that total.
New exchange-traded funds seemed to be introduced each day in 2011, with more money managers getting into the business. There were 3,019 ETFs at the end of 2011, up 22% from a year earlier, according to an ETFGI report.
But three firms continued to dominate the ETF business, BlackRock's iShares division had 39% of the global marketshare, State Street Global Advisors followed with 17.68% and Vanguard Group Inc. had 12.1%, according to data from ETFGI as of April 30.
Indeed, those three firms were at the top of P&I's ranking of managers of sponsored ETFs. BlackRock reported $593.36 billion; SSgA, $271.24 billion; and Vanguard, $170.86 billion at year-end 2011.
A key trend in 2011 for the ETF business echoed a broader move among investors generally: flows into fixed income and out of equities. Fixed-income ETF flows in the U.S. market alone were up 39% in 2011 to $179.9 billion, according to data supplied by SSgA.
“On a relative basis, fixed-income ETFs industrywide have been the fastest-growing ETF segment over the last few years,” said Kevin Quigg, global head of ETF strategy and consulting at SSgA in New York.
Mr. Quigg said the volatility of the equity markets has helped spur investor interest in fixed-income ETFs.
Equity-based ETFs still make up the lion's share of the marketplace, 67%, according to Ms. Fuhr. Fixed-income offerings comprise 16%, and commodity-based ETFs, the next largest group, 12%.