Facts, Facts and More Facts: Q3 2012 ETF Distribution Channel Analysis

In the third quarter of 2012, the growth of Canadian- and U.S.-listed ETFs held by Canadian investors accelerated, ending the frame at $63.8 billion. In the year-to-date, the ETF assets have expanded by 22.6%. The expansion was led by institutional investors who increased their holdings by over 15% in the third quarter alone. On the retail side, year-to-date growth within commission-based full-service brokerage accounts outpaced that of fee-based accounts and managed asset programs, a likely indication that the substitution of direct securities and mutual funds by ETFs in commission-based accounts is gathering steam. Meanwhile, the pace of expansion in the ETF holdings in the online/discount brokerage channel has lagged that of the other channels.

The growth in the U.S.-listed holdings within both retail distribution channels (full-service and online/discount brokerage) has been sluggish thus far this year. Fixed income funds have dominated sales in 2012 and advisors and investors have first and foremost looked to the domestic shelf to fill their appetite for this asset class, leaving U.S. funds to largely rely on the demand for exposure to precious metals. While larger U.S. ETF sponsors stalled, smaller firms, such as Guggenheim and PIMCO, made notable inroads.

For more information see our Q3 2012 ETF and Index Fund Report which now includes a quarterly update of detailed ETF holdings data by distribution channel http://investoreconomics.com/issue/etf-and-index-funds-q3-2012-pre-release. Posted by John Skinner John@iei.ca.