Bull market steers ETF assets to big gains

Net inflows across the board from stocks to bonds as advisers use funds for core, tactical plays
MAY 06, 2013
The roaring pace of the equity markets has helped drive total exchange-traded-fund assets up 23% over the past 12 months. The latest data from the Investment Company Institute shows that through April, domestic-equity-ETF assets reached more than $854 billion, up from $696 billion 12 months earlier. International-equity ETF assets topped $355 billion, from $280 billion a year ago, and bond ETFs topped $258 billion, up from $208 billion a year ago. “This kind of growth is a combination of the market being up strongly, and also reflects investor adoption of ETFs,” said Todd Rosenbluth, director of ETF research at S&P Capital IQ. For April, the value of ETF gross issuance ($108 billion) exceeded gross redemptions ($98.8 billion) by $9.7 billion. “We're seeing investors use ETFs more, and we're seeing more advisers and investors use ETFs both as core and in a more-tactical way to diversify a portfolio,” Mr. Rosenbluth added. “The ETF growth trend is a higher rate than you will see in mutual funds, particularly in domestic-equity funds, where the rate has slowly moved back, but not at this kind of pace.”

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