(January 25, 2013) — Assets held in exchange-traded products (ETP) reached a record $2 trillion this month, as product ranges have grown to entice investors, BlackRock has reported.
The ETP market had record inflows last year, the giant asset manager’s research team said today, attracting $262.7 billion in new money. Assets at the end of the year had grown by 27%.
Good growth continued through the start of the New Year and on January 18 the ETP market was valued at $2 trillion, BlackRock said. This was double the $1 trillion figure it reached in 2009, some 19 years after the first product was launched.
Dodd Kittsley, global head of ETP research for BlackRock, said: “The dynamics of the ETP market are changing and developing. As ETPs become better known and understood in different regions and amongst different types of investors, uptake is fast increasing. Added to this, ETP providers are expanding and deepening their coverage of different assets classes and regions, allowing investors to put ETPs to use in new ways and employ them to access areas where they couldn’t before, such as emerging market debt.”
Fixed income ETPs and emerging market equity ETPs saw record inflows last year, notching up $70 billion and $54.6 billion respectively.
Following the quasi-collapse of the banking system in 2008, many investors rushed towards passively invested funds, such as ETPs, in an attempt to avoid paying actively managed fund fees for relatively poor performance.
There was an explosion of new products and providers, alongside long-established asset managers launching ETP units.
A good indicator of the potential growth of the market came when BlackRock acquired competitor Barclays Global Investors, which owned the large ETP provider iShares, in December 2009.
“ETPs were once thought of as primarily equity-based funds for institutional investors, and today’s milestone proves this is certainly no longer the case,” said Kittsley.