Pittsburgh, Pennsylvania
29 January 2016
Reporter: Stephanie Palmer

Broadridge: ETF assets took off in 2015

Exchange traded fund (ETF) assets held by financial intermediaries reached an all-time high of $2.2 trillion in 2015, according to data from Broadridge’s Fund Distribution Intelligence.

ETF assets saw an increase of $124 billion, or 6.1 percent, which the report attributed to an increase in the popularity of passive investment vehicles.

Passively managed index funds and ETFs have increased by 2 percent between Q4 2014 and Q4 2015, while actively managed funds and ETFs have dipped by 1 percent. According to Broadridge, this trend is set to continue as use of ETFs and index funds increase for core allocations.

In contrast, although the total of long-term mutual fund assets exceeded ETFs at $7.29 trillion, this is $161 billion less than the total at the end of 2014, marking a dip of 2.2 percent.

The only channels that saw an increase in long-term mutual fund assets were the bank and discount channels, which registered increases of $52 billion and 29 billion, respectively. These are also the two channels with the highest usage of passively managed products.

A larger increase in the use of passive products was seen in retail distribution channels, which registered a 2.6 percent increase, compared to a 1.6 percent increase in institutional channels.

Among the retail channels, registered investment advisors saw the strongest growth in ETF distribution, increasing from $413 billion in Q4 2014 to $500 billion in Q4 2015. This is also an increase over Q3 2015, which registered $465 billion in ETF distribution.

Registered investment advisors now make up 30 percent of all usage of passive products, although online retail shareholders still make the majority, with 58 percent of all usage.

Conversely, independent broker dealers are the highest users of active funds, holding more than 80 percent in active investments.

Passively managed products now make up 31 percent of usage across all channels, an increase of two percentage points compared to the end of 2014.

Broadridge attributes this to an increase in use of both index funds and ETFs by advisors, and also in model portfolios.

Frank Polefrone, senior vice president of Broadridge’s data and analytics business, said: “The increased usage of passive investments across all distribution channels accelerated in 2015. Our analysis shows that passively managed index and ETF assets increased by two percent during 2015, while actively managed funds and ETFs saw a one percent decrease.”

The Broadridge Fund Distribution Intelligence analyses sales and asset data across more than $9 trillion of long-term mutual fund and ETF assets spanning more than 900 distributors.

More news
The latest news from Asset Servicing Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
LAS hires fund and corporate services duo
16 January 2018 | Luxembourg | Reporter: Jenna Lomax
LAS has appointed Jean-Luc Neyens and Cornelius Bechtel to strengthen the firm’s fund and corporate services
DTCC hires new data services director
16 January 2018 | New York | Reporter: Jenna Lomax
Lind will be responsible for guiding data businesses, including services that leverage data derived from DTCC’s global processing platforms
Confluence sets its predictions for 2018
16 January 2018 | Pittsburgh | Reporter: Jenna Lomax
Confluence expects to see “eventual positive systemic change” when meeting new back-office demands
Tadawul initiates new measures for market efficiency
16 January 2018 | Riyadh | Reporter: Jenna Lomax
The Saudi Stock Exchange Tadawul has implemented new measures in an effort to raise market efficiency, boost investor access, security and liquidity
Tom Carey takes on new role at Broadridge
16 January 2018 | New York | Reporter: Zsuzsa Szabo
Broadridge Financial Solutions has appointed Tom Carey to head up the firm’s new international business Broadridge International
Raymond James selects Red Deer for MiFID II
16 January 2018 | London | Reporter: Jenna Lomax
Raymond James Investment Services has chosen Red Deer’s research valuation management solution to adhere to MiFID II
SWIFT and CSDs join forces on proxy voting DLT
15 January 2018 | Brussels | Reporter: Jenna Lomax
SWIFT and seven CSDs have partnered to explore how distributed ledger technology could be implemented in proxy voting and for digital assets
More news