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ETF Growth Outpaces Mutual Funds

ETFs are seeing significant growth vis-à-vis mutual funds, according to new data from Broadridge Financial Solutions. In retail channels (independent and wirehouse broker dealers, registered investment advisors and discount brokerage firms) for the twelve-month period ended March 2015, ETFs added $267 billion, representing a 24.4% increase in assets, compared to an increase in mutual fund holdings of $255 billion, representing a 5.6% increase. The period represents the first in which ETFs beat mutual funds in terms of dollars, according to a recent Wall Street Journal article. Broadridge’s data shows that retail distribution of ETFs increased at more than double that in institutional channels and that registered investment advisers were the largest channel (21%), followed by independent broker dealers, private banks, and wirehouse firms (all at 18%).

The data also shows that mutual fund assets grew $665 billion (9.5%) year-over-year in the first quarter of 2015. This growth was fueled largely through institutional channels with banks holding the largest increase in assets under management with a year-over-year jump of $147 billion (23%), according to Broadridge.