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Monday, July 20, 2009

Signs That the ETF Industry Continues to Shift

Since the inception of the first U.S.-listed exchange traded fund (ETF) in 1993, the industry has blossomed.

According to the National Stock Exchange, at the end of May 2009, there were 829 ETFs and ETNs listed in the United States offered by 18 different providers on three stock exchanges, comprising total assets of $594 billion. Additionally, there were 137 other exchange traded products (ETP) with assets of $60.8 billion from 19 providers on two exchanges.

According to Barclays‘ April 2009 snapshot of the ETF industry, the average total expense ratio for equity ETFs in the U.S. is 0.32% vs. 0.78% for the average equity index tracking fund and 1.41% for the average active equity fund, further enforcing the low-cost characteristic of ETFs. When analyzing sectors, year-to-date, materials have performed the best returning 16.5%, followed by consumer staples which are up 11.9% year-to-date.

Of all the ETF providers, iShares is the largest with offerings of 177 different ETFs, State Street Global Advisors is second with 85 different ETFs. Of all ETFs, the SPDR S&P 500 (SPY) is by far the most actively traded with the largest amount of assets under management at nearly $60.7 billion. The SPY has had the largest change in assets under management as well, losing nearly $33.2 billion year-to-date.

June 2009 numbers should be released soon – stay tuned and we’ll write about it here.

Disclosure I am long many ETFS and they are a important part of my portfolio.

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