ETFs approaching 'critical mass' as clients accelerate investments

ETFs approaching 'critical mass' as clients accelerate investments
January net inflows into exchange-traded funds highest in 16 months; bond funds the main beneficiaries
MAR 08, 2012
By  John Goff
Exchange-traded funds in January attracted the most money in 16 months, driven by record deposits to bond ETFs. Investors poured $34.1 billion into ETFs worldwide, the most since September 2010, according to data compiled by New York-based BlackRock Inc. (BLK), the industry's largest provider. Fixed-income ETFs gathered $9.1 billion, compared with the previous high of $6.7 billion in January 2009. The popularity of low-cost index-based strategies surged among bond investors in the past year as yields hovered near record lows and some top long-term performers, including Bill Gross at Pacific Investment Management Co., trailed markets. Assets in bond ETFs, including exchange-traded notes and trusts, have more than quadrupled since the beginning of 2008 to $271 billion, BlackRock data show. “We are reaching a critical mass with fixed-income ETFs,” Matt Tucker, head of fixed-income strategy at BlackRock's ETF unit iShares, said in a telephone interview. “We're seeing investors exercise more control of their investing through ETFs.” RELATED ITEM Top muni bond ETFs » U.S.-registered funds accounted for $7.2 billion of bond ETF deposits in January, he said. Of that, two-thirds went into funds focused on investment-grade and high-yield corporate bonds. Bond ETF investors are concentrating less on the broadest indexes, Tucker said. Funds that track the BarCap U.S. Aggregate Bond Index captured 6 percent of the money that flowed into all U.S. bond ETFs in January, he said. The same funds manage 20 percent of U.S. bond ETF assets. “Investors are shifting to more customized segments in the market,” Tucker said. ETFs, which typically hold baskets of securities that track an industry or market benchmark, trade throughout the day like stocks. In September 2010, the funds attracted $39.1 billion, according to BlackRock. --Bloomberg News--

Latest News

The 2025 InvestmentNews Awards Excellence Awardees revealed
The 2025 InvestmentNews Awards Excellence Awardees revealed

From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.

Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty
Top RIA Cresset warns of 'inevitable' recession amid tariff uncertainty

Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.

Edward Jones joins the crowd to sell more alternative investments
Edward Jones joins the crowd to sell more alternative investments

“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.

Record RIA M&A activity marks strong start to 2025
Record RIA M&A activity marks strong start to 2025

Sellers shift focus: It's not about succession anymore.

IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients
IB+ Data Hub offers strategic edge for U.S. wealth advisors and RIAs advising business clients

Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.