Despite global volatility and a lack of clarity regarding when the Federal Reserve will raise interest rates, U.S.-listed exchange-traded funds continue to gather assets at breakneck speed.
After adding $19 billion last month, exchange-traded products trading in the United States, including ETFs and exchange-traded notes (ETNs) have hauled in $145 billion in new assets through the first nine months of this year a record for that time frame, according to ETFGI, a London-based ETF research firm.
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Last month, fixed-income ETFs were the dominant asset gatherers, accounting for half of the month's inflows after the Federal Reserve declined to boost borrowing costs following its September meeting. During the third quarter, five of the top 10 asset-gathering ETFs were bond funds, a quintet that includes the iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE:TLT),iShares Short Treasury Bond Fnd (NYSE:SHV) and the SPDR Lehman 1-3 Month T Bill (ETF) (NYSE:BIL).
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Asset-Gathering ETF Trend
That data jibes with recent data from Charles Schwab Corp. (NYSE:SCHW). The seventh-largest U.S. ETF issuer said in its Schwab Third-Quarter Snapshot that half of the third-quarter inflows across its ETF platform were allocated to bond funds.
That trend is continuing again in the fourth quarter as four of the top five asset-gathering ETFs and five of the top 10 are fixed income funds. In the current quarter, investors are favoring corporate bond funds, including high-yield fare, such as the SPDR Barclays Capital High Yield Bnd ETF (NYSE:JNK), the second-largest junk bond ETF.
YTD through the end of September 2015, ETFs/ETPs have gathered record net inflows of US$145.4 billion. Equity ETFs/ETPs gathered the largest net inflows YTD with US$91.6 billion, followed by fixed income ETFs/ETPs with US$38.9 billion and commodity ETFs/ETPs with US$1.1 billion, according to ETFGI.
Leaders In Asset-Gathering
BlackRock, Inc. (NYSE:BLK)'s iShares was the top asset gatherer among ETF issuers last month, followed by State Street Corp (NYSE:STT) State Street Global Advisors.
iShares gathered the largest net ETF/ETP inflows YTD with US$58.2 billion, followed by Vanguard with US$52.8 billion, WisdomTree Investments, Inc. (NASDAQ:WETF) with US$19.6 billion, Deutsche Bank with US$16.4 billion, and Schwab ETFs with US$9.8 billion in net inflows, noted ETFGI.
Half of the top 10 asset-gathering ETFs on a year-to-date basis are iShares funds, while three are Vanguard funds. The other two, the top two in fact, are currency hedged ETFs sponsored by WisdomTree and Deutsche Bank. The WisdomTree Europe Hedged Equity Fund (WisdomTree Inter Hedged Eq Fund (NYSE:HEDJ)) and the Deutsche X-trackers MSCI EAFE Hedged Equity ETF ( DBX ETF Trust (NYSE:DBEF)) have added over $27.5 billion in new assets combined this year.
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