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The Markets January 24, 2012
ETF Industry Crossed $1T in 2011
The U.S. exchange-traded funds (ETF) industry grew to
more than $1.04 trillion in assets under management in 2011, according to a
report from State Street Global Advisors (SSgA).
Reported by Rebecca Moore
This is a 5.5% increase from the previous year, with investor inflows offsetting declining equity prices. During the year, U.S. ETFs attracted $119 billion of new assets, as investors increased their exposure to fixed income, dividend/fundamental strategies and developed markets outside the U.S.
2012 ETF & Investment Outlook: Sink or Swim, developed by the SPDR ETF Strategy & Consulting Group, features insights on macroeconomic trends impacting the financial markets and examines key developments expected to shape the ETF industry and asset flows in 2012.
“Despite significant headwinds facing the financial markets in 2011, investors continued to increase their appetite for ETFs, which was evidenced by industry assets crossing the trillion dollar tipping point,” said Kevin Quigg, global head of ETF Strategy & Consulting at SSgA. “Our 2012 investment outlook is cautious due to the European debt crisis; however, the ETF industry is well-positioned to build on its success in recent years, as awareness of the benefits of ETFs continues to grow.”
The report outlines three potential market scenarios for 2012. It also highlights two investment themes expected to prevail regardless of what direction the markets may take.
With the Federal Reserve intending to maintain a low rate environment until 2013 or longer, generating income via higher-yielding fixed income, dividend producing equities and hybrid securities is one theme likely to continue to shape investment decisions in 2012. In an environment where the growth potential of developed nations seems relatively muted, another theme projected to garner investor attention is the opportunity for growth in emerging markets.
In addition to shaping ETF product development in 2012, these investment themes are also poised to drive asset flows, as an increasing number of investors use ETFs to implement their investment strategies.
To download a copy of 2012 ETF & Investment Outlook: Sink or Swim, visit SPDR University at http://www.spdru.com, or ETF Fact or Fiction at http://www.etffactorfiction.com, a new website launched by State Street to provide individual investors with ETF education.