The Growth of Exchange-Traded Funds

Created by KURTOSYS with kind permission by the Investment Company Institute The groudh of EXCHANGE-TRADED FUNDS WHAT IS AN ETF? An ETF is a fund or investment company whose shares are traded intraday on stock exchanges at market-determined prices. Investors may buy or sell ETF shares through a kroker or in a brokerage account just as they would the shares of any publicly traded company. In the United States, most ETFS are structured as open-end investment companies (open-end funds) or unit investment trusts, but other structures also exist - primarily for ETFS investing in commodities, currencies, and futures. THE UNITED STATES HAS THE LARGEST ETF MARKET 8% AFRICA & ASIA-PACIFIC AMERICAS 3% OTHER The U.S. ETF market – with 1,294 17% EUROPE funds and nearly $1.7 trillion in assets 72% UNITED STATES under management at year-end 2013 – remained the largest in the world, accounting for 72 percent of the $2.3 trillion in ETF assets worldwide Percentage of total net assets, year-end 2013 · Total worldwide ETF assets: $2.3 trillion BILLIONS OF DOLLARS; YEAR-END, 2002-2013 TOTAL NET ASSETS AND NUMBER OF ETFS (U.S.) 1,675 1,337 120 TOTAL NET ASSETS OF NON-1940 ACT ETFS' TOTAL NET ASSETS OF 1940 ACT ETFS? 1,048 992 101 109 777 75 1,611 608 129 531 1,217 423 15 580 301 891 939 228 703 102 151 408 496 226 296 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 NUMBER OF ETFS 113 119 152 204 359 629 728 797 923 1,134 1,194 1,294 1 The funds in this category are not registered under the Investment Company Act of 1940 and invest primarily in commodities, currencies, and futures. 2 The funds in this category are registered under the Investment Company Act of 1940. Note: Data for ETFS that invest primarily in other ETFS are excluded from the totals. Components may not add to the total because of rounding. TOTAL NET ASSETS OF ETFS WERE CONCENTRATED IN LARGE-CAP DOMESTIC STOCKS (U.S.) BILLIONS OF DOLLARS, YEAR-END 2013 444 BROAD-BASED DOMESTIC EQUITY GLOBAL/INTERNATIONAL EQUITY 247 203 211 143 146 88 87 42 64 LARGE-CAP GLOBAL SMALL-CAP DOMESTIC SECTOR EMERGING MARKETS BOND AND HYBRID 3 1 This category includes international, regional, and single country ETFS. 2 This category includes funds-both registered and not registered under the Investment Company Act of 1940-that invest primarily in commodities, currencies, and futures. 3 Bond ETFS represented 99.41 percent of the assets in the bond and hybrid category in 2013. Note: Data for ETFS that invest primarily in other ETFS are excluded from the totals. NUMBER OF COMMODITY AND SECTOR ETFS TOTAL NET ASSETS OF COMMODITY AND SECTOR ETFS CU.S.) (U.S.) 4% UTILITIES 6% OTHER 7% OTHER 24% COMMODITIES* 3% UTILITIES 13% TECHNOLOGY 11% TECHNOLOGY 24% COMMODITIES* 7% REAL ESTATE 11% REAL ESTATE 8% CONSUMER 9% CONSUMER YEAR-END 2013 16% NATURAL RESOURCES YEAR-END 2013 12% FINANCIAL 14% NATURAL RESOURCES 12% FINANCIAL 8% HEALTH 10% HEALTH TOTAL: 311 COMMODITY AND SECTOR ETFS TOTAL: $267 BILLION * This category includes funds-both registered and not registered under the Investment Company Act of 1940-that invest primarily in commodities, currencies, and futures. Note: Data for ETFS that invest primarily in other ETFS are excluded from the totals. Components do not add to 100 percent because of rounding. ETF-OWNING HOUSEHOLDS ARE WILLING TO TAKE MORE INVESTMENT RISK CU.S.) PERCENTAGE OF ALL U.S. HOUSEHOLDS, MUTUAL FUND-OWNING HOUSEHOLDS, AND ETF-OWNING HOUSEHOLDS, MAY 2013 LEVEL OF RISK WILLING TO TAKE WITH FINANCIAL INVESTMENTS 21% 10 16 30% 26 SUBSTANTIAL RISK FOR SUBSTANTIAL GAIN 45% 35 36 ABOVE-AVERAGE RISK FOR ABOVE-AVERAGE GAIN 48 AVERAGE RISK FOR AVERAGE GAIN 10 46 BELOW-AVERAGE RISK FOR BELOW-AVERAGE GAIN 33 12 UNWILLING TO TAKE ANY RISK 10 ALL U.S. HOUSEHOLDS MUTUAL FUND-OWNING ETF-OWNING HOUSEHOLDS HOUSEHOLDS SEE HOW KURTOSYS MAKES FUND MARKETING EFFICIENT, INTERACTIVE AND BEAUTIFUL AT WWW.KURTOSYS.COM/FUNDMARKETING Source: 2014 compilation from the 2014 Investment Company Fact Book (http://www.ici.org/pdf/2014_factbook.pdf). For the most up-to-date figures about the fund industry, please visit www.ici.org/research/stats. Copyright © 2014 by the Investment Company Institute. All rights reserved. No reproduction without pemission from ICI. Created by Kurtosys Systems with kind pemission from ICI. KURTOSYS MID-CAP OTHER INTERNATIONAL COMMODITIES 2