A new report from Aite Group examines the exchange traded fund (ETF) industry, specifically fixed income ETFs and their position within the broader ETF landscape.
According to Aite Group, within the past few years the fixed income ETF has evolved into a viable investment instrument. These ETFs were a scarce breed on the fund landscape as recently as the mid-aughts, but have multiplied by about twenty fold since then, with assets under management increasing by a factor of three since 2007. While the outlook is positive for fixed income ETFs, which meet many goals of the investment community--including offering diversification across asset classes and serving broad investment strategies--obstacles exist. These include the need for relatively large amounts of capital to launch new fixed income ETFs and potential difficulty in developing fixed income strategies.
“Despite certain significant issues, the current low-interest-rate environment and need for income-producing investment strategies indicates that fixed income ETFs are here to stay,” says John Jay, senior analyst with Aite Group and co-author of this report. “Growth in fixed income ETFs is only just beginning. As they develop further, mutual fund firms will have to scramble just to maintain the status quo.”
Aite Group is an independent research and advisory firm focused on business, technology, and regulatory issues and their impact on the financial services industry. With expertise in banking, payments, securities & investments, and insurance, Aite Group’s analysts deliver comprehensive, actionable advice to key market participants in financial services. The firm is headquartered in Boston with a presence in Chicago, New York, San Francisco, London, and Milan.
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Rabu, 16 Maret 2011
Rabu, 13 Oktober 2010
Morningstar Says That While Long-Term Mutual Funds Saw Inflows Of $14.3 Billion During Sept., U.S. Equity Outflows Continued
Press Release
CHICAGO, Oct. 13 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today reported estimated U.S. mutual fund and exchange-traded fund asset flows through September 2010. While long-term mutual funds saw inflows of $14.3 billion during the month, the U.S. equity outflows continued, reaching $16.3 billion despite the best September for stocks in 71 years. The divergence in flows between international-stock and domestic-equity funds also continued to grow. Although international-stock funds saw modest inflows of $600 million in the third quarter, U.S. stock funds lost roughly $42.7 billion. Investors have pulled $80.9 billion from U.S. stock funds over the trailing 12 months, but contributed nearly $34.3 billion to international-stock funds—a difference of $115.2 billion. U.S. ETFs saw inflows of roughly $25.4 billion in September, boosting year-to-date inflows to $64.9 billion.
Additional highlights from Morningstar's report on mutual fund flows:
* Taxable-bond funds enjoyed another strong month, with inflows of $23.5 billion. After two months of inflows, money market funds saw redemptions of $29.1 billion in September, bringing total redemptions for the asset class to $873.5 billion since January 2009.
* Notwithstanding their volatile performance since the market peaked in October 2007, investors have steadily contributed assets to alternative funds. Bear-market funds saw inflows of $3.5 billion over the past three years despite annualized losses of 12.4 percent, and long-short funds attracted $21.8 billion in flows even though the average fund dropped an annualized 3.6 percent.
* Although commodity funds have taken in nearly $7.5 billion in 2010, bringing overall assets to $33.6 billion, investor sentiment may be shifting from broad-basket commodity funds to equity precious-metals funds. Equity precious-metals funds have been the best-performing category over the last decade by far, earning an annualized 24.3 percent through September. The category's inflows of $692 million during the month topped inflows of $654 million for broad-basket commodity funds.
* While PIMCO and Vanguard continued to dominate inflows in September thanks to their broad fixed-income offerings, Matthews Asia funds attracted assets of nearly $800 million during the month. Reflecting investor preference for non-U.S. equity exposure, the firm has absorbed $2.9 billion in 2010.
Additional highlights from Morningstar's report on ETF flows:
* The most-popular ETF asset class in September was U.S. stocks, with inflows of $16.7 billion. While inflows into the heavily traded SPDR S&P 500 SPY and PowerShares QQQ QQQQ bolstered assets for U.S. stock ETFs overall, the predominant theme in the current environment is investor appetite for dividends. iShares Dow Jones Select Dividend DVY and Vanguard Dividend Appreciation VIG have seen a spike in demand in recent months.
* While TIPS ETFs have seen outflows on deflationary concerns, commodities, REITs, and dividend-paying ETFs have enjoyed increasing popularity. REITs serve as a solid inflation hedge, and iShares Dow Jones US Real Estate IYR and Vanguard REIT Index VNQ saw $312 million and $371 million in net inflows in the third quarter, respectively.
* Gold ETFs remained attractive in September, but iShares Silver Trust SLV gathered assets of more than $421 million to lead precious-metals ETF flows during the month.
* Strong demand for emerging-markets ETFs continued in September. Of the $14.5 billion in inflows that investors added to international-stock ETFs in the third quarter, more than $12.5 billion, or 86 percent, went to ETFs covering broad emerging-market indexes. Conversely, ETFs offering exposure to developed international markets continued to experience outflows.
To view the complete report, please visit http://www.global.morningstar.com/septflows10. For more information about Morningstar Fund Flows, please visit http://global.morningstar.com/fundflows.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of Internet, software, and print-based products and services for individuals, financial advisors, and institutions. Morningstar provides data on approximately 360,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 4 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. The company has operations in 21 countries.
©2010 Morningstar, Inc. All rights reserved.
MORN-R
Media Contact:
Carling Spelhaug, 312-696-6150 or carling.spelhaug@morningstar.com
CHICAGO, Oct. 13 /PRNewswire/ -- Morningstar, Inc. (Nasdaq: MORN), a leading provider of independent investment research, today reported estimated U.S. mutual fund and exchange-traded fund asset flows through September 2010. While long-term mutual funds saw inflows of $14.3 billion during the month, the U.S. equity outflows continued, reaching $16.3 billion despite the best September for stocks in 71 years. The divergence in flows between international-stock and domestic-equity funds also continued to grow. Although international-stock funds saw modest inflows of $600 million in the third quarter, U.S. stock funds lost roughly $42.7 billion. Investors have pulled $80.9 billion from U.S. stock funds over the trailing 12 months, but contributed nearly $34.3 billion to international-stock funds—a difference of $115.2 billion. U.S. ETFs saw inflows of roughly $25.4 billion in September, boosting year-to-date inflows to $64.9 billion.
Additional highlights from Morningstar's report on mutual fund flows:
* Taxable-bond funds enjoyed another strong month, with inflows of $23.5 billion. After two months of inflows, money market funds saw redemptions of $29.1 billion in September, bringing total redemptions for the asset class to $873.5 billion since January 2009.
* Notwithstanding their volatile performance since the market peaked in October 2007, investors have steadily contributed assets to alternative funds. Bear-market funds saw inflows of $3.5 billion over the past three years despite annualized losses of 12.4 percent, and long-short funds attracted $21.8 billion in flows even though the average fund dropped an annualized 3.6 percent.
* Although commodity funds have taken in nearly $7.5 billion in 2010, bringing overall assets to $33.6 billion, investor sentiment may be shifting from broad-basket commodity funds to equity precious-metals funds. Equity precious-metals funds have been the best-performing category over the last decade by far, earning an annualized 24.3 percent through September. The category's inflows of $692 million during the month topped inflows of $654 million for broad-basket commodity funds.
* While PIMCO and Vanguard continued to dominate inflows in September thanks to their broad fixed-income offerings, Matthews Asia funds attracted assets of nearly $800 million during the month. Reflecting investor preference for non-U.S. equity exposure, the firm has absorbed $2.9 billion in 2010.
Additional highlights from Morningstar's report on ETF flows:
* The most-popular ETF asset class in September was U.S. stocks, with inflows of $16.7 billion. While inflows into the heavily traded SPDR S&P 500 SPY and PowerShares QQQ QQQQ bolstered assets for U.S. stock ETFs overall, the predominant theme in the current environment is investor appetite for dividends. iShares Dow Jones Select Dividend DVY and Vanguard Dividend Appreciation VIG have seen a spike in demand in recent months.
* While TIPS ETFs have seen outflows on deflationary concerns, commodities, REITs, and dividend-paying ETFs have enjoyed increasing popularity. REITs serve as a solid inflation hedge, and iShares Dow Jones US Real Estate IYR and Vanguard REIT Index VNQ saw $312 million and $371 million in net inflows in the third quarter, respectively.
* Gold ETFs remained attractive in September, but iShares Silver Trust SLV gathered assets of more than $421 million to lead precious-metals ETF flows during the month.
* Strong demand for emerging-markets ETFs continued in September. Of the $14.5 billion in inflows that investors added to international-stock ETFs in the third quarter, more than $12.5 billion, or 86 percent, went to ETFs covering broad emerging-market indexes. Conversely, ETFs offering exposure to developed international markets continued to experience outflows.
To view the complete report, please visit http://www.global.morningstar.com/septflows10. For more information about Morningstar Fund Flows, please visit http://global.morningstar.com/fundflows.
About Morningstar, Inc.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offers an extensive line of Internet, software, and print-based products and services for individuals, financial advisors, and institutions. Morningstar provides data on approximately 360,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 4 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. The company has operations in 21 countries.
©2010 Morningstar, Inc. All rights reserved.
MORN-R
Media Contact:
Carling Spelhaug, 312-696-6150 or carling.spelhaug@morningstar.com
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