Assets In US ETFs Reach $900 Billion

September 29, 2010

The ETF juggernaut keeps on trucking toward $1 trillion mark.

Assets in U.S. ETFs crossed the $900 billion threshold for the first time yesterday, propelled by inflows into gold and other commodities, as the industry kept moving toward the $1 trillion mark many analysts have been predicting for some time, according to data compiled by IndexUniverse.com.

To be sure, the jitters coursing through the global economy have made the asset gathering anything but linear.
Europe’s sovereign debt crisis was largely the reason for the dip in assets in early spring. But since June, assets have been rising again. The more than 1,000 U.S ETFs had a total of $903.38 billion as of yesterday. The world's first exchange-traded fund, the SPDR S&P 500 ETF (NYSEArca: SPY), was launched in 1993 and is the world's largest. It ended yesterday's trading session with $80 billion in assets.

More recently, many of the flows have been in inflation hedges such as gold. On Tuesday, the SPDR Gold Trust (NYSEArca: GLD) collected $214.9 million, putting it at the top of IndexUniverse.com’s daily creations list, and making it the single-biggest piece of commodities inflows that totaled $394.7 million yesterday. Gold futures settled above $1,300 a troy ounce on Tuesday, a significant milestone in its own right.

While few investors expect another market meltdown, they are bracing for a protracted period of weakness as the world’s biggest economy digs itself out of its worst downturn since the 1930s.

Much of the anxiety relates to plans in the works at the Federal Reserve to stimulate the economy by buying long-dated Treasurys, which would keep bond yields lower and, theoretically, spur borrowing. Investors and analysts worry that such efforts could devalue the dollar and create difficult-to-control inflationary pressures in the future.

Globally, the ETF industry now has about $1.35 trillion in assets, including Europe and
Asia.

The European and Asian ETF industries now have about $279 billion and $70 billion in assets, respectively, according to data compiled by Deutsche Bank.

 

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