In 2019, the ETF industry is expected to top $4 trillion for the first time. By the end of 2018, a high water mark of almost $3.4 trillion was reached in the U.S.
According to the Investment Company Institute, ETF assets under management multiplied one hundred-fold to $3.4 trillion, while mutual funds tripled to $19 trillion, from 1999 through 2017.
Its a runaway train of growth for ETFs. Funding this explosive growth is the mutual funds industry which has seen mounting outflows as ETFs are becoming the vehicle of choice for passive and active investors.
While institutions have long been on board, individual private investors are understanding and appreciating the benefits that ETFs offer, such as low costs, tax efficiency, incremental exposure to niche sub-asset classes, ease of allocation modeling, and daily liquidity in the markets with real time transparent pricing.
…individual private investors are understanding and appreciating the benefits that ETFs offer…
The ETF industry has experienced a long, positive trend, doubling about every five years, a trend that is likely to keep speed as investors are continuing to gravitate to ETF positions in favor of managed mutual funds for thier portfolio allocations, including fixed income, commodities futures and specialty niches such as specific regions, industries and companies.
BlackRock iShares, State Street Global Advisors SPDRs and Vanguard are the main benefactors of the popularity explosion, while other players such as Invesco, ProShares, WisdomTree and other large and smaller niche players are growing their shares.