John Bogle recently said that ETFs are going to prove to be a bad thing for investors. Well, investors love them, according to the ICI, and the number of them continues to grow. So much so, that consultants are opening businesses focusing on ETFs.
As our own Diana Britton reported recently, "During Bloomberg’s Portfolio Manager Mash-Up in New York Thursday, John Bogle, founder of the Vanguard Group, told portfolio managers he was skeptical of the way ETFs are being used, calling the structure 'marketing' and 'speculation.' Vanguard itself runs 64 ETFs.
“'What must be obvious to everyone in this room is that ETFs are the best marketing innovation in the 21st century,' Bogle said. 'The question we should be looking at is, are ETFs the greatest investing innovation in this century. And the evidence is overpowering that they are not.'"
Here is the ICI take on the subject:
ICI REPORTS ETF ASSETSWASHINGTON, DC, FEBRUARY 24, 2012 The combined assets of the nation’s exchange-traded funds (ETFs) were $1.134 trillion in January, according to ICI. The Institute’s monthly statistical collection also includes the value of shares issued and redeemed by exchange-traded funds.
Statistics contained in the Institute’s monthly ETF report have been obtained from information provided to ICI by exchange-traded funds and commodity funds. Commodity funds are listed in the Domestic (Sector/Industry) category. A detailed breakdown of the monthly ETF data is available on our website at http://www.ici.org/info/etfdata.xls
Assets of Exchange-Traded Funds by Type
Millions of dollars
January 2012 December 2011 January 2011
Total Domestic Equity 665,922 618,421 589,491
Domestic (Broad-Based) 429,576 400,696 385,995
Domestic (Sector/Industry) 236,346 217,724 203,496
Global/International Equity 272,686 245,114 273,070
Hybrid 403 377 323
Bond 194,708 184,222 141,189
All 1,133,718 1,048,134 1,004,072
Value of Shares Issued and Redeemed by All Exchange-Traded Funds
Millions of dollars
January 2012 December 2011 2011 2010
Gross Issuance 105,037 114,779 1,320,482 1,106,456
Gross Redemptions 77,250 96,264 1,202,840 988,474
Net Issuance 27,787 18,515 117,642 117,982
Number of Exchange-Traded Funds by Type
January 2012 December 2011 January 2011
Total Domestic Equity 593 591 501
Domestic (Broad-Based) 289 287 247
Domestic (Sector/Industry) 304 304 254
Global/International Equity 384 368 304
Hybrid 7 7 6
Bond 171 168 132
All 1,155 1,134 943
Highlights: Assets of all exchange-traded funds rose in January by $85.58 billion, or 8.2 percent, to $1.134 trillion. Over the past 12 months, ETF assets increased $129.65 billion, or 12.9 percent. Assets in domestic equity ETFs increased $76.43 billion since January 2011, and global equity ETFs assets fell $384 million during this period. At the end of January 2012, assets of bond funds were $194.71 billion and hybrid funds were $403 million.
During January, the value of all ETF shares issued exceeded that of shares redeemed by $27.79 billion. In January 2011, the value of all ETF shares issued exceeded that of shares redeemed by $9.18 billion.