ETFs are grabbing market share from mutual funds. No surprise given all the advantages ETFs offer, including much lower fees and great liquidity, just to name two.
Strategic Insight, a US firm that monitors the mutual fund industry, says mutual funds suffered net redemptions in 2009 while ETFs saw net subscriptions. The information appeared in a report issued by Blackrock Asset Management, the new owners of IShares, the world’s biggest ETF manager. The chart below is for the US but the same holds true for Canada.
The ETFs that were the most popular compared to their mutual fund cousins were the ones offering exposure to US and International equities. Globally, total ETF assets hit a new high of US$942 billion in October, up 32% for the year. The MSCI World Index was up 20% to October. That difference in asset growth and returns is another indicator that investors are using ETFs to get into the market.