Industry-Wide ETF Assets Undergo YoY Growth in Q3 2015

ETF assets climbed by $144 billion, or 7.4% during Q3, ending September 30, 2015, fueled in large part by retail

Broadridge Financial Solutions, Inc. (NYSE:BR), a provider of investor communications and technology solutions, has reported data for exchange-traded funds (ETF) year-to-date (YTD) ending September 30, 2015, according to a Broadridge statement.

In particular, ETF assets climbed by $144 billion, or 7.4% during Q3 ending September 30, 2015, fueled in large part by retail channels, as calculated by its Fund Distribution Intelligence. Over this same time interval however, long-term mutual fund assets from third party distributors declined by a factor of -2.0%, or $156 billion.

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Broadridge Financial utilizes a Fund Distribution Intelligence (FDI) tool – the utility helps aggregate a variety of information into a unified sales and asset data collection, tracking performance of both mutual funds and ETF assets. The FDI tool collects data on a monthly basis, which is then analyzed by respective channel, geography, etc.

As has been the case for the majority of 2015, retail channels have continued to generate the majority of ETF asset growth, now constituting 63% of all ETF assets. This is down from 87% observed for the YTD ending June 30, 2015.

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Moreover, during the period ending September 30, 2015, registered investment advisors (RIAs) led all retail channels, having added $46 billion in ETF assets, followed by wirehouses with $45 billion, and independent broker dealers (IBDs) with $41 billion – for an aggregated sum of $132 million. By extension, the only retail channel with increased assets for long-term mutual funds over this period was the RIA channel with an increase of $29 billion.

Not all ETF product categories performed the same however in Q3 2015 – fixed income saw gains of 23.0%, allocation funds 22.0%, equity 11.0%, and alternative investments by 5.0%. Conversely, two ETF categories that saw a decline in assets held by the retail channels were commodities falling by -18.0% and convertible ETFs by -9.0%. Additionally, all global product categories for long-term funds orchestrated a decrease in assets over this same period ending September 30, 2015.

According to Frank Polefrone, Senior Vice President (SVP) of Broadridge’s Access Data product suite in a recent statement on the metrics, “ETF assets continued year-on-year growth through the third-quarter, despite the worst stock market drop since 2008, with advisors accounting for the lion’s share of investment.”

“This trend demonstrates the increased use of passive products. RIAs, which hold a higher percentage of passively managed funds, were the only retail channel with an increase of long-term fund assets over the last year,” he added.

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