Exchange-traded funds (ETFs) listed in the U.S., the world's largest ETF market, keep packing on assets. Last month, investors added $47.3 billion to U.S.-listed ETFs, bringing the total assets under management tally to a record $2.758 trillion at the end of February, according data from ETFGI, a London-based ETF research provider.
Investors have added money to U.S. ETFs in 12 consecutive months. At the end of February, exchange-traded products (ETPs) including ETFs listed on global exchanges had a combined $3.84 trillion in assets under management. ETF growth is outpacing that of other asset classes, including hedge funds, and while institutional investors are critical drivers of ETF asset flows, recent data suggest that retail investors are playing increasingly important roles in bolstering the size of these instruments. (See also: Little Guys Powering Big ETF Growth.)
Last month, equity, fixed income and commodities ETFs all captured new assets. But of the $47.3 billion that flowed into U.S. ETFs in February, over $41.5 billion went into equity or bond funds, according to ETFGI data. Year to date, just two of the top 10 asset-gathering ETFs are bond funds, while the other eight are equity-based strategies.
Data indicate that investors are still embracing U.S. stocks, as the iShares S&P 500 Core ETF (IVV), SPDR S&P 500 ETF (SPY) and Vanguard S&P 500 ETF (VOO) are three of the top asset gatherers to start 2017. The iShares Core MSCI Emerging Markets ETF (IEMG) is the top asset gatherer among international ETFs, with 2017 inflows of $4.671 billion, putting it just behind the $4.676 billion added by IVV. (See also: Why Money Is Pouring Into Plain Vanilla ETFs.)
Data also confirm that investors continue to flock to low-fee ETFs. For example, of this year's top 10 asset-gathering ETFs, the one with the highest annual expense ratio is the iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD). That is not to say LQD is expensive – its annual fee of 0.15% is still below that of the average of ETF. (See also: Top 3 Investment Grade Corporate Bond ETFs.)
In terms of issuers, "iShares gathered the largest net ETF/ETP inflows in February with $14.25 billion, followed by Vanguard with $13.13 billion and SPDR ETFs with $9.72 billion net inflows," said ETFGI. Of this year's top 10 asset-gathering ETFs in the U.S., six are iShares ETF, including five of the issuer's core funds, and three are Vanguard funds. (See also: Guide to ETF Providers: iShares.)