It was a “very good” year for exchange-traded funds (ETFs), says Deborah Fuhr, managing partner of ETFGI in London, who shared her firm’s data on ETF inflows in 2014. Globally, ETFs reached a record US$2.79 trillion in assets across 5,580 ETFs. There are now 239 providers listed in 62 exchanges in 49 countries, meaning that these products are now available to most investors around the world.
December proved the best month on record with US$61.5 billion in net new asset inflows.
How did we do here in Canada? ETFGI’s data show it was another record year with net new assets of US$9.2 billion flowing into Canadian ETFs—US$2.7 billion of that came in during the month of December, an excellent month for ETF inflows in this country.
As ETFs worldwide and in Canada draw more and more investors, the number of very large ETFs is also growing: there are now 691 ETFs with more than US$1 billion in assets.
The U.S. continues to be a focus for investors eager to find growth in an increasingly volatile global economy. At the end of 2014, the S&P Dow Jones had the largest amount of ETF/exchange-traded product assets tracking its benchmarks—a 30.6% market share. Much further behind was the MSCI, second with a 13.5% market share, followed by Barclays with a 9.0% market share.
In Canada, the provider landscape is also shifting, with the very largest players losing market share as ETFs become more popular. Compared to the large global universe, there are relatively few players here in Canada: just nine. The top providers (iShares, BMO AM, Horizons, Vanguard and Powershares) saw their combined market share decline slightly in 2014. As ETFGI noted:
BMO AM and Vanguard have seen their market shares increase from 20.0% to 24.4% and from 2.8% to 4.8%, respectively. Powershares’ market share has remained fairly stable, going from 2.7% to 2.9%, while iShares has seen its market share decline from 66.6% to 59.0% during 2014. Horizons’ market share has also declined—from 6.5% to 5.5%.