Global assets invested in exchange-traded funds and exchange-traded products eclipsed the $1.7 trillion threshold in August - an all-time high.
According to ETFGI LLP, a London-based independent research and consulting firm covering the ETF industry, that $1.7 trillion in assets marks a 15.5% increase from the total invested in these increasingly popular products from August 2011.
Over the past 10 years, the compounded annual growth rate of these products globally has been 26.5% and there are now 4,713 ETFs and ETPs available with 9,620 listings from 204 providers on 56 exchanges.
"In a world where investment products come and go in the blink of an eye, ETFs have proved that they are here to stay and might be considered one of the most innovative financial products in the last two decades," Deborah Fuhr, managing partner at ETFGI, said in a statement. "They are one of the few products that are offered on the same terms to both retail and institutional investors"
"Market volatility may be making investors wary about the stock market, but they continue to find exchange-traded funds and other exchange traded products useful tools," she added.
Through the end of August 2012, ETFs and ETPs saw net inflows of $143 billion which is $23 billion above the level of net new assets at this time last year. Equity ETFs and ETPs have gathered the largest net inflows accounting for $76 billion, followed by fixed-income ETFs and ETPs with $47 billion and commodity ETFs and ETPs capturing $10.5 billion.
Fixed Income ETFs and ETPs were especially popular with $47 billion in net new assets - up more than $1 billion from last year. Within the fixed-income universe, corporate bond products have gathered the largest net inflows with $18.5 billion, followed by high-yield products with $11 billion and broad/aggregate bond exposures with $4.9 billion.
Equity-focused ETFs and ETPs have attracted $76 billion in investor assets, $7 billion more than was invested through the same period last year. Commodity flows checked in at $10.5 billion, slightly lower than this time last year. Meanwhile, precious metals have gathered the largest net inflows with $9.5 billion, followed by broad commodity with $1.3 billion and energy with $901 million. Agriculture experienced the largest net outflows at $1.2 billion.
Larry Barrett writes for Financial Planning.