ETF Asset Growth In 2016 Par For The Course

Year-over-year, assets in ETFs are up nearly 14%, but the growth has not been uniform across every asset class, even if every asset class has made gains.

In terms of annual growth, this year is on par with 2015, which saw assets grow 13.7% from Aug. 18, 2014, to Aug. 17, 2015.

"While ETF growth was lackluster at the beginning of the year, with generally weak growth or just plain outflows in many classic 'risk' assets, the second half of the year is coming on strong.  July in particular was incredibly strong, and as the market rallied, investors used ETFs to express their bullish opinions in every large asset class and most corners of the market.  It's pretty rare you see so many segments gaining assets at the same time," said FactSet Director of ETFs Dave Nadig.

U.S. fixed income, the third-largest asset class, has seen some of the strongest growth, up by almost $100 billion to $400 billion, an increase of more than 31%. In contrast, U.S. fixed income saw only a 16.4% increase for the 12-month period ended Aug. 17, 2015, meaning growth in U.S. fixed-income ETF assets has nearly doubled.

U.S. equity ETF assets, while representing more than half of the total $2.4 trillion in ETF assets, are up just 13% over the past 12 months. Assets in this category were up almost 17% over the one-year period ended Aug. 17, 2015.

International equity assets have remained essentially flat at $513 billion in assets under management, despite representing the majority of launches over the past 12 months. The asset class’ growth has decelerated from the 12-month period prior to that, when its assets under mangement were up 13%.

Int'l Fixed Income Growth Leader

International fixed income, however, has seen almost 60% asset growth, jumping from $26 billion in AUM to nearly $41 billion. That’s up significantly from the 12 months ended Aug. 17, 2015, when international fixed income saw growth of only 5.2%.

Commodities, too, have had an excellent 12 months, with assets rising approximately 50% to $76 billion, mainly driven by strong performance in the precious metals space. That’s a huge change from the 12 months ended Aug. 17, 2015, when assets were down 23%.

Alternatives, although a fairly tiny asset class at $4.3 billion in assets, is still up some 32% year-over-year, while currency assets are up some 13% to $1.4 billion. And asset allocation is up 11% to $6.4 billion in total assets. Alternatives assets climbed just 10% during the 12-month period ended Aug. 17, 2015, but at the same time, currency ETF assets were down 20%. Asset-allocation ETF assets grew 14% during that period.

The leveraged and inverse fund categories saw the smallest degrees of growth, with leveraged ETF assets up 7% over the 12 months to $25.6 billion. Inverse ETF assets were up just 6% at $19.4 billion.

Leveraged ETF asset growth is almost flat with the category’s growth for the 12 months ended Aug. 17, 2015, but inverse ETF assets were down nearly 14% during the same period.  

Below are snapshots of the total assets in each asset class at 12-month intervals. 

As of August 16, 2016:

As of August 17, 2015:

As of August 18, 2014:

Contact Heather Bell at [email protected].