2013 was another good year for the ETF industry, as a ton of new funds hit the market. Total assets under management eclipsed the $1.6 trillion mark as well, further cementing Exchange-Traded Funds as a popular way to achieve broad exposure.
This was especially the case in certain corners of the ETF world, as several fund categories saw a surge in popularity in the year. The focus was definitely on equities, but some bond funds also managed to attract a decent amount of assets, including the following three types:
Floating Rate Bonds- As worries over higher interest rates hit, floating rate and low duration securities became extremely popular. Some of the big winners in this space include; the PowerShares Senior Loan ETF (BKLN), the Vanguard Short-Term Bond ETF (BSV), and the iShares Floating Rate Note ETF (FLOT). All three of these added at least $3 billion in assets on the year, with BKLN actually adding more than $4.8 billion, the tenth most for all funds (see Prepare for Rising Rates with These ETFs).
Developed Markets- While emerging markets may have struggled, industrialized nations saw plenty of strength. Japan and Europe were extremely popular, as ‘Abenomics’ boosted Japan, while Europe surging from the ashes boosted that part of the developed world.
In this market, the WisdomTree Japan Hedged Equity Fund (DXJ) and the iShares MSCI Japan Index Fund (EWJ) both saw inflows of over $6.9 billion. Meanwhile, in Europe, the Vanguard FTSE Europe Fund (VGK) also saw strong inflows, totaling more than $6.7 billion (read Japan ETFs One Year After Abenomics).
U.S. Market- In what should be no surprise given how well U.S. equity markets have performed, large cap ETFs led the way higher. Funds like IVV and VOO both saw great inflows, but the winner was again SPY. The fund added more than $11 billion in assets and now has well over $163 billion under management.
Losers in the ETF World
There were also a host of losers on the year too, as a few funds lost billions. This includes emerging Market products like EEM and VWO which both saw their asset bases shrink by over $4.5 billion on the year. LQD, an investment grade bond fund, was also a big loser, seeing its asset base tumble by over eight billion as investors sought out other types of debt.
And finally, the biggest loser of all was the SPDR Gold Trust (GLD), which shed $24 billion in AUM on the year. The fund was once close to removing SPY from its throne, but it has clearly fallen far from those days (see all the precious metal ETFs here).
For more on these ETFs and the trends in the market, make sure to watch our short video below:
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