Investors purchased $12.9 billion in exchange-traded funds and exchange-traded notes in June, according to a report released today by the ETF Industry Association or ETFIA.
Year-to-date cash inflows total $75.9 billion, bringing assets held in U.S. listed exchange-traded funds and exchange-traded notes to $1.18 trillion at the end of June 2012, a year-over-year increase of 7 percent from $1.11 trillion for June 2011, according to the ETFIA. Year-to-date inflows were highest for Vanguard ($29.6 billion), Blackrock ($16.2 billion), SSgA ($10.3 billion), Invesco/Power Shares ($5,021 billion) and Wisdom Tree ($2.6 billion).
The number of U.S.-listed exchange-traded funds and exchange-traded notes increased 15 percent to 1,476 at the end of June 2012, compared to 1,288 at the end of June 2011.
High net worth investors – who have $5 million to $25 million in investable assets – have helped fuel this trend by increasing their exposure to exchange-traded funds, according to Millionaire Corner research. At the end of 2011, nearly one-third (32 percent) of high net worth investors owned shares in exchange-traded funds, and their average balance was $324,000. Two years earlier, one-fourth of high net worth investors owned exchange-traded funds for an average balance of $240,000.
ETFs appeal to high net worth investors seeking the diversification of a pooled investment and the trading features of a stock. (Learn more about the pros and cons of exchange-traded funds.) The largest providers of exchange-traded funds, by assets under management are Blackrock ($482.3 billion), SSgA ($290.6 billion), Vanguard ($208.3 billion), Invesco/Power Shares ($55 billion) and Van Eck ($23.7 billion).
“Exchange traded funds continue to increase in number and popularity, growing to one of the most commonly traded securities on the stock exchange as both institutional and the average retail investor gain greater access to broad or specialized market exposure,” according to ETF Trends.
An exchange-traded note is a debt product that carries credit risk and may not be suitable for all investors.