According to data from Broadridge’s Fund Distribution Intelligence tool, ETF assets sold through independent and wirehouse broker-dealers, registered investment advisors and discount brokerage firms grew by $267 billion, year on year. Mutual fund assets sold through the same channels increased by $255 billion.
Total ETF assets grew by 21 percent, or $379 billion, to reach $2.19 trillion, while mutual fund assets grew by 9.5 percent, or $665 billion, year-on-year.
Registered investment advisors continued to be the leading distributors of ETFs, representing $472 billion in assets, followed by independent broker-dealers, which accounted for $400 billion, and wirehouse firms, which represented $385 billion in assets.
The increase in mutual fund assets was driven mainly by institutional channels. Banks, private banks and trust companies saw a growth in mutual fund assets of 17 percent, or about $410 billion.
Frank Polefrone, senior vice president of Broadridge company Access Data, said: “ETFs are gaining ground among retail distributors driven by a few key factors, namely their low cost structure, but also the fact that ETFs are used in asset allocation models, which are more prevalent among retail advisors.”
He added: “While mutual fund assets continued to grow in the retail channels, this growth was outpaced on an absolute basis by ETFs – the first time this has happened since we started tracking this data more than four years ago.”
Other findings included a 12 percent year-on-year growth in long-term mutual fund and ETF assets under management from third-party distribution channels, which rose to $9.8 trillion.
ETF assets distributed in institutional channels increased by $112 billion, showing less than half the growth in those distributed in retail channels.
Mutual fund assets under management in banks showed the highest year-on-year increase, rising 23 percent, or $147 billion.
Gerard Scavelli, president of Broadridge’s mutual funds and retirement solutions group, said: “Our data not only provides insight into emerging distribution channels that present growth opportunities, but also gives fund firms visibility into their own market share.”
He added: “This intelligence allows firms to improve strategic decisions regarding distribution, product development, and sales and marketing to allocate resources effectively, and accelerate growth.”