Total assets in exchange traded funds jumped to a record $6trn globally by the end of October, doubling in size in less than four years, driven by a bull market in the US, according to the latest figures.
Global ETF asset growth as of October 31 surpassed the $2.89bn levels of 2015, according to London-based independent research and consultancy firm ETFGI.
The sector's rapid growth has attracted heightened scrutiny by regulators who are concerned about the influence of ETFs as they spread deeper and wider into financial markets worldwide.
Regulators are concerned if regulations are fit for purpose given the growth in assets and types of ETFs"
"Regulators are concerned if regulations are fit for purpose given the growth in assets and types of ETFs," Deborah Fuhr, managing partner and founder of ETFGI, told The National. "They are monitoring the situation."
The global ETF industry has 6,919 ETFs with 14,326 listings and assets worth $6tn from 400 providers on 68 exchanges in 57 countries as of October 2019.
Assets in European-domiciled ETFs and exchange traded products stood at $960bn at the end of October, setting a fresh record for the industry and putting the sector on course to reach a milestone $1trn in assets.
The ETFGI figures show BlackRock's iShares division — Europe's largest ETF provider, with $429bn — continues to dominate inflows across Europe. Its ETFs and ETPs registered a net $44.7bn since the start of the year.
US-based exchange-traded funds have racked up a record $4trn in assets under management as of this year, with 136 ETF providers offering 2,062 ETFs to investors. The top 10 ETFs trading on US exchanges account for 28% of total US assets under management, with the top 20 US ETFs accounting for nearly 40% of assets in the space.
Global ETF assets could reach $12tn by the end of 2023, according to BlackRock.
An ETF is a type of investment fund that can be traded quickly and easily, similar to stocks and shares. They come with no upfront costs apart from the brokerage's dealing charges and annual fees, which are far lower than traditional mutual investment funds. There is no fund manager deciding which stocks and other assets to invest in; instead they passively track their chosen index, country, region or commodity, regardless of whether it goes up or down.