U.S.-listed exchange traded funds attracted higher inflows in 2011 to take the business to $1 trillion in assets under management. Leading the charge, Vanguard brought in the most in new investment dollars for the second year in a row.
While smaller providers gained greater market share as larger providers attracted lower inflows, Vanguard still brought in $35.8 billion in new inflows last year, compared to iShares at $28.8 billion and State Street Global Advisors with $17.2 billion, reports Chris Flood for the Financial Times.
ProShares , the largest provider of leveraged and inverse ETF products, saw inflows rise to $6.4 billion from $2.8 billion in 2010. Inflows to U.S.-listed leveraged and inverse ETFs more than doubled to $11.1 billion in 2011, despite growing scrutiny on the investment product.
Inflows to long fixed-income ETFs rose 70% to $44.6 billion in 2011 as investors piled into U.S. government bonds. Vanguard Total Bond Market ETF (NYSEArca: BND - News ) and iShares Barclays Aggregate Bond (NYSEArca: AGG - News ) attracted the largest amount of last year’s inflows, gathering $5.2 billion and $2.4 billion, respectively, according to the FT story.
Corporate debt was also a popular draw. The iShares iBoxx High Yield Corporate Bond ETF (NYSEArca: HYG - News ) and the iShares iBoxx Investment Grade Corporate Bond ETF (NYSEArca: LQD - News ) were among the top 10 for inflows.
“Leverage in the corporate sector has declined in the past few years and default rates remain low. Even in a slow-growth economy, we don’t expect much increase in defaults,” Kathy Jones, fixed income strategist at Charles Schwab, said in the FT article.
U.S. equities were among the few global markets that showed positive gains. U.S. stock ETFs saw a 10.3% increase to $41.2 billion in assets in 2011, with the SPDR S&P 500 ETF (NYSEArca: SPY - News ) garnering $6.3 billion. Dividend plays also brought in their fair share, with the Vanguard Dividend Appreciation ETF (NYSEArca: VIG - News ) adding $4.1 billion. [ Global ETFs See Record Inflows ]
The weakest performing areas were commodity ETFs, which saw outflows of $45 million in 2011, and currency ETFs, which only attracted $1.5 billion.
For more information on ETF performance, visit our ETF Performance Reports category or take a look at our ETF Analyzer for more up-to-date numbers.
Max Chen contributed to this article.