Exchange traded funds gaining momentum in US.

Publication: Europe Intelligence Wire

Bookmark this article Print this article Link to this article Email this article Digg It! Add to del.icio.us RSS

COPYRIGHT 2004 Financial Times Ltd.

(From Funds International)

The battle for dominance of the index tracking fund market between conventional mutual funds and exchange traded funds (ETF) is hotting- up. And as the trend is now developing, ETFs are edging increasingly ahead, particularly in the US The latest data published by the US Investment Company Institute (ICI) clearly indicates that ETFs in the US are becoming increasingly more popular than conventional mutual funds in the index tracking market.

Net investment issuance of new equity ETF shares in August of $1.05 billion reflected a 97 percent increase over the $534 million in the previous month. This brought net investment inflows into ETFs virtually into line with those into all US equity mutual funds where the ICI reported an 88 percent month-on-month decline in net inflows to $1.09 billion in August.

New listings of ETFs in the US is also maintaining a steady growth trend. Since the start of 2004 the total number of ETFs has increased from 119 to 143 with domestic equity ETFs up from 72 to 96. This pace must be seen in the context of an asset class that had its beginnings as recently as 1993 when State...

Read the full article for free courtesy of your local library.