ETF Industry Busts Records In Third Quarter

The third quarter of 2009 has been another hit for the exchange traded fund (ETF) industry. ETFs have benefited from a rebound in the stock market, pushing assets to new records both domestically and globally.

ETFs have seen assets rise for the third quarter to an industry total of $631 billion, a gain of 17% over the second quarter. According to Barclays, there were 721 ETFs at the end of the third quarter, up from 697 at the end of the second quarter, reports Luisa Beltran for Ignites.

Beltran notes that National Stock Exchange reports growth at $698 billion, up 17% from June, at $597.6 billion. Assets under management for SPDR Gold Shares (GLD) are included in NSX’s calculations, which makes up for most of the difference in numbers.

Current research on the ETF industry indicates that the asset pool of funds that passively track indexes are on the cusp of eclipsing assets in traditional mutual funds, reports Michael Santoli for Barron’s. According to analyst Brad Hintz of Bernstein Research, the products’ 40% annual asset-growth rate of the past 10 years will slow modestly, to around 20% to 25% over the next three to five years, but on a much larger base.

Vanguard posted the most gains, yet still remains the third largest provider. Year-to-date cash flows for Vanguard ETFs were $18.3 billion through September. Leveraged and inverse ETF providers Direxion and ProShares suffered the biggest losses. Leveraged ETFs posted $3.4 billion in outflows during July and August, after public scrutiny from FINRA and The Securities and Exchange Commission (SEC).

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