Going forward, there will be more providers, more users, and more penetration by ETFs in the global market for investment products. Money managers will need to decide how to best market and position their firms in this new environment as more investor types adopt ETF and various types of active ETFs become a reality. Whether or not they intend to launch ETFs of their own, everyone needs an ETF strategy.
The year 2013 was another banner year for ETFs, with global assets climbing to a record $2.4 trillion according to ETFGI. With investors fleeing gold funds, net asset flows of $243 billion actually trailed the previous year's $265 billion, but strong market appreciation and robust flows to a variety of equity categories was enough to drive a 23% increase in assets from a year earlier.1 Growth was especially strong in the U.S. market, where $177 billion of net new flows helped boost assets 26% over the previous year to a record $1.7 trillion. Fewer new ETFs were launched in the U.S. during 2013, and four funds shuttered for every 10 introduced. With index products already available in virtually every asset class, more fund sponsors are choosing to rationalize product lines while simultaneously looking for new opportunities.