Facts, Facts and More Facts: ETFs – Investors are holding what & where?

In the latter half of 2011 Canadian-listed ETF assets on the retail brokerage platforms grew to reach $24.9 billion while U.S.-listed ETF assets cascaded 9.0% to $8.7 billion. The commission-based segment of the full-service brokerage platform, which swelled by 16.8%, was home to most of the growth in retail assets of Canadian-listed ETFs during the period. This trend runs counter to the widespread view which contends that the foremost source of growth in ETF assets at full-service brokerages will be a byproduct of their usage as building blocks within fee-based programs. Amidst a tumultuous market environment Canadian-listed ETF assets in the online/discount channel, which account for 36% of all Canadian-listed retail ETF assets, remained quite steady sustaining just a mild contraction.

For U.S.-listed ETFs, on the other hand, the full-service brokerage channel emerged as an arena of lackluster performance. Since we last checked in assets in the channel are down 12.9%. Part of this decrease can be attributed to the fact that since June assets of the iShares Emerging Markets Index and iShares MSCI Brazil ETFs have shrunk by 30%; in June, each one of these funds was one of the 10 largest in the channel.

Institutional holdings of ETFs saw tremendous gains in the second half of 2011, recording the largest six-month increase in assets since Investor economics began collecting this data back in 2009. Institutional holdings of Canadian-listed ETFs now stand at $16.5 billion, having grown by 12.4% since June. Part of this is due to the candid embrace by many fund wrap programs of ETFs; programs such as Invesco Trimark’s Intactive Portfolios, BMO’s ETF Portfolios, and Franklin Templeton’s Quotential. For more details see our fourth-quarter edition of the ETF & Index Funds Report http://investoreconomics.com/issue/insight-etf-and-index-funds-reportPosted by Alexander Baker, alexander@iei.ca.