www.ici.org

Frequently Asked Questions About the US ETF Market

How big is the US ETF market?
How many Americans own ETFs?
How many US ETF providers are there?
How has demand for ETFs grown?
What are recent trends in demand for global and international equity ETFs?
Where are assets of ETFs concentrated?

How big is the US ETF market? 

As of December 2014, the total number of index-based and actively managed exchange-traded funds (ETFs), including commodity ETFs, domiciled in the United States stood at 1,411. Total net assets of these ETFs were $1.974 trillion and accounted for 13 percent of total net assets managed by long-term mutual funds, ETFs, closed-end funds, and unit investment trusts at the end of 2014.

Find ICI’s latest ETF stats at ICI’s Exchange-Traded Funds Resource Center.

How many Americans own ETFs? 

An estimated 5.2 million, or 4 percent, of US households held ETFs in mid-2014. Of households that owned mutual funds, an estimated 9 percent also owned ETFs.

How many US ETF providers are there? 

As of December 2014, 52 sponsors provided ETFs as an investment product.

How has demand for ETFs grown? 

Demand for ETFs has increased as institutional investors have found ETFs a convenient vehicle for participating in, or hedging against, broad movements in the stock market. Increased awareness of these investment vehicles by retail investors and their financial advisers also has bolstered demand for ETFs.

One way to track investor demand is to look at net issuance of ETF shares. Net issuance refers to the total dollar amount of shares issued/created by an ETF sponsor, less the total dollar amount of shares redeemed by the ETF sponsor. For more on how ETF shares are created and redeemed, see “Frequently Asked Questions About ETF Basics and Structure.”

Investor interest in ETFs has grown rapidly. From year-end 2005 through year-end 2014, ETFs issued $1.4 trillion in net new shares. Investor demand for broad-based domestic equity ETFs accounted for 35 percent of this total. These equity ETFs issued $498 billion in net new shares during this period, and their assets were $936 billion in December 2014.

Net Share Issuance of ETFs
Billions of dollars, 2002–2014

Note: Data for ETFs that invest primarily in other ETFs are excluded from the totals.

Source: Investment Company Institute

What are recent trends in demand for global and international equity ETFs? 

Over the past decade, investor demand for global and international equity ETF has been strong, with these ETFs issuing a cumulative $393 billion in net new shares.

Annual net issuance of global and international equity ETFs totaled $47 billion in 2014, down from a record high of $63 billion in 2013 and a robust $52 billion from 2012.  

Where are assets of ETFs concentrated? 

Total net assets of ETFs are concentrated in large-cap domestic stocks. As of December 2014, large-cap domestic equity ETFs accounted for the largest proportion of ETF assets—28 percent, or $556 billion. Global and international ETFs were the second largest category with 21 percent ($415 billion) of all ETF assets.

Total Net Assets of ETFs AreConcentrated in Large-Cap Domestic Stocks
Billions of dollars, December 2014

1This category includes international, regional, and single country ETFs

2The funds in this category invest primarily in commodities, currency, and futures, and are not registered under the Investment Company Act of 1940

3Bond ETFs represented 99.2 percent of the assets in the bond and hybrid category.

Note: Data for ETFs that invest primarily in other ETFs are excluded from the totals.

Source: Investment Company Institute

February 2015