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News Bites | The changing ETF market

October 21, 2011

News Bites is an occasional column in NICSA News that collects memorable facts, quotes and insights from our recent reading.

This edition of News Bites looks at recent surveys from the BNY Mellon Asset Servicing (in conjunction with Strategic Insight) and from McKinsey & Company. Both look at the second phase of growth in the ETF market. These were our takeaways:

1. ETF sales are gathering momentum in North America and Europe. Asset gains from 2008 to 2010 were spectacular — over 80% — which was more than 3x the rate of growth in total fund assets in those regions over the same period. These gains come off an already substantial base. (McKinsey & Company)

2. This growth has encouraged fund managers to enter the market. There are now 20 firms with a significant presence in ETFs. In 2007, there were just 14 firms with measurable market share. (BNY Mellon – Strategic Insight)

3. This vibrant marketplace has supported a rush of fund introductions. While some of the new funds have been in core categories (e.g., S&P 500), most have been in less traditional areas, notably commodities and emerging markets. (BNY Mellon – Strategic Insight) Here’s a quick look at the largest U.S. ETF introductions for the year ended March 2011:

4. But for every successful new ETF, there were 3 that failed. (McKinsey & Company)

To learn more about ETFs, check out the NICSA webinar archives. NICSA members have unlimited access to replays.

Links to the surveys discussed in this post:

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