As the ETF industry has continued its rapid expansion, there has been much debate surrounding the sustainability of the current growth and the potential saturation of the market. The first ETFs were relatively simple products, offering exposure to the world’s most widely-followed equity benchmarks. But the last ten years have seen hundreds of new ETFs hit the market that go far beyond “plain vanilla.” Leveraged ETFs, intelligent indexing, exchange-traded commodities, and actively-managed funds are just a few of the innovations the industry has seen.
Some believe that the ETF industry has gone into “absolute overdrive.” Others think that any reports of an ETF issuance bubble have been greatly exaggerated. While there are some valid points made on both sides, it is perhaps best to let the numbers decide. According to the latest data from the National Stock Exchange, more than 120 exchange-traded products have been launched this year, covering a wide variety of asset classes, geographies, and investment styles. These funds have seen aggregate cash inflows this year of more than $7.3 billion and have total assets of more than $7.7 billion. Several of these funds have not received the welcome that their issuers had expected, achieving less than $10 million in aggregate assets. But others have been tremendously popular, raking in hundreds of millions of dollars as investors embraced both innovative funds and those that offer a slight tweak to existing products.
The ten most successful ETFs of 2009, as judged by total cash inflows for the year, include:
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