Fund performance

Investors poured $102.8 billion into exchange-traded funds run by BlackRock Inc., the world’s largest asset manager, as they made record use of the fastest-growing product in the money management industry.

In 2015, much of the industry's growth outlook will depend on how competition fares between the cascade of funds entering the market, currency hedging and smart beta trends, and the momentum new non-transparent ETFs can gain with investors and offerings.

Pacific Investment Management Co.’s biggest mutual fund had the worst year of client withdrawals in the history of fund management as the firm lost both of its co-chief investment officers, Bill Gross and Mohamed El-Erian. Investors pulled $19.4 billion from Pimco Total Return Fund in December, bringing redemptions in 2014 to a record $105 billion.

The $162.8 billion Pimco Total Return Fund returned 4.7 percent in 2014, trailing 53% of comparable funds, according to data compiled by Bloomberg. In 2013, it lost 1.9%, lagging behind 65% of peers.

Companies that ignore the big picture are severely punished in the marketplace, especially when they misstep. Companies that display concern for what happens outside their walls get the nod from a new generation of investors.

Year-to- date, energy ETFs have attracted $9.25 billion of new money, the most of any sector behind real estate funds and more than triple the same period in 2013.

States and local governments boosted debt sales to $43.7 billion so far in December, the highest monthly total in at least a year.

A big jump in clients’ risk appetite is why the Retirement Advisor Confidence Index climbed 2.3 points in December, reaching a five-month high of 54.

The SPDR Nuveen Barclays Build America Bond ETF proved the best choice during a record-setting year for muni exchange- traded funds. Its 20.6 % gain through Dec. 23 was highest among the 26 muni ETFs tracked by Bloomberg.

Municipals delivered solid performance overall thanks to the strength of the long duration and high-yield segments.

Investors in the world’s biggest ETP backed by bullion sold the most gold in 18 months as the U.S. economic recovery cut demand for a haven.

The ETF industry in the U.S. has finally broken through the $2 trillion milestone, demonstrating the product’s surge in popularity with investors. Through December 22nd, assets have increased 18% in 2014 from $1.698 trillion to $2.007 trillion based on positive market performance and net new assets.

As investors pull billions out of commodities, Yale University Professor K. Geert Rouwenhorst’s funds are still attracting new money. SummerHaven Investment Management oversaw $1.5 billion as of November, from $600 million in January, even as raw-material prices fell and its exchange-traded fund declined.

F-Squared Investments agreed to pay $35 million over U.S. regulatory claims that it misled investors about the performance of a trading strategy used by exchange-traded funds.

The pursuit of yield has driven both advisors and investors toward newer, more complex ETFs and closed-end funds — products that use leverage, employ derivatives, deal in options and futures, sell short and so on. When such funds are held in clients’ IRAs they can generate additional problems for advisors, creating tax headaches and raising questions about investor suitability.

Janus shares surged 43% on Sept. 26, their biggest one-day gain ever, after it announced that Bill Gross would join the firm from Pimco. Hiring Gross was the boldest step yet in an almost five-year effort by Richard M. Weil to attract new money and change the public perception of Janus, a firm still known primarily for its growth-equity funds.

The industry saw Bill Gross attracting $769 million to Janus, the global ETP market breaking an asset record, a prediction on how much of 401(k) contributions that target-date funds will capture by the end of the decade and a J.P. Morgan executive joining Wilton, Conn.,-based Commonfund as CEO.

Money managers’ profits in North America last year surpassed pre-crisis levels, rebounding to $34 billion on asset and revenue growth, according to a study by McKinsey & Co. Profits were 18% above the pre-crisis peak in 2007 after assets reached $30 trillion. Profits at asset managers globally also moved past 2007 levels, increasing 15% to $65 billion from 2007. Assets reached a record $64 trillion last year.

Stung by poor returns and large redemptions, 889 hedge funds worldwide shut in the first 11 months of the year, above the annual average of 810 in the five years since the global financial crisis of 2008, according to figures from research firm Eurekahedge. In contrast, 56 Asia-focused funds had closed by the end of November, less than half the average 135 closures in the previous five years.

With ETF assets now poised to cross the $2 trillion mark in the U.S., industry experts gathered at the annual IMN global indexing and ETF conference in Scottsdale, Ariz., marveled at the rapid growth, innovation and market acceptance of exchange traded products in the last decade.