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Shuttered ETFs contribute to 12% asset drop

By David Hoffman

January 30, 2009 12:34 pm ET

Despite the fact that 2008 saw a record 46 exchange traded funds close, the total number of ETFs actually increased year-over-year to 747, from 629, according to a report released today by State Street Global Advisors of Boston.

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The increase was due to the launch of 164 ETFs in 2008, the second-highest number of new introductions in a calendar year, the report revealed.

The most successful introductions were leveraged/inverse ETFs from ProShare Advisors LLC of Bethesda, Md., and Newton, Mass.-based Direxion Funds, according to the report.

ETF assets, however, continued to be concentrated in the three largest providers: Barclays Global Investors of San Francisco, Boston-based SSgA and The Vanguard Group Inc. of Malvern, Pa.

Together, the three controlled 86.8% of all ETF assets.

ETFs saw positive cash flows from investors in 2008 but still saw assets decline due to market depreciation, the report said.

Assets in all ETFs ended the year at $534 billion, down $74 billion, or 12%, from 2007.

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