It's a fact, assets under management at various
exchange-traded products (ETFs, ETNs and related fare) are
soaring. The AUM total for U.S. ETFs and ETNs currently stands at
over $1.2 trillion following an 11 percent pop in the first half
of 2012. Some research has
said ETF assets could double or triple by
For all of 2011, U.S.-listed ETFs raked in $117 billion in
assets. Through September 24, 2012, the number was almost $131
according to BlackRock (NYSE:
), parent company of iShares.
ETF observers believe the $1.2 trillion U.S.-listed ETF market
will attract $2 trillion by 2013, $5 trillion by 2015 and $10
trillion by 2020,
ETF Trends reported earlier this year
. These factoids highlight the notion the the ETF industry's
growth has been truly exponential.
Those statistics are also broad. Astute investors want to know
to which ETFs the flows are going because rising inflows and an
increase in share creations can tell investors an ETF is poised
to rally, if it has not done so already. Here are several
examples of that have seen impressive AUM growth in recent
PowerShares Senior Loan Portfolio (NYSE:
The PowerShares Senior Loan Portfolio, the first ETF to offer
exposure to senior loans, might be qualified as a high-yield
instrument, but there are some differences between this ETF and a
traditional junk bond fund.
For starters, BKLN has a 30-day SEC yield of 4.8 percent and
while that is decent, it lags the 5.7 percent offered by the SPDR
Barclays Capital High Yield Bond ETF (NYSE:
) and related products. Second, a senior loan is different from a
traditional junk bond in that a senior bank loan is surpasses all
other obligations for the debtor.
It is also worth noting that BKLN's underlying paper is
, a trait that cannot be underestimated amid calls of diminishing
liquidity in the U.S. junk bond market. BKLN's solid yield,
monthly dividend and increased use of the fund by some
professionals in place of credit default swaps have helped the
ETF to almost $1.06 billion in AUM as of October 12. That is up
$580 million in July
Global X SuperDividend ETF (NYSE:
Not surprisingly, another ETF with a high yield makes the list.
Highlighting investors' thirst for yield, SDIV was able to pull
$100 million in AUM in just 14 months of
Not bad and the ETF celebrated that milestone in late August.
Not even two months later, SDIV now has $148.1 million in AUM.
Said another way, the ETF's assets total has surged 48 percent in
less than 60 days. A 30-day SEC yield of 6.7 percent and a
monthly dividend have no doubt played a part.
iShares MSCI Emerging Markets Minimum Volatility Index
It used to be that an ETF needed to attract at least $25 million
in assets in its first year of trading to be deemed a success.
That number would later rise to $50 million and these days
an ETF has to have $100 million in assets
to be considered "good" in the eyes of some experts.
All those number mean absolutely nothing to EEMV because when
the ETF celebrates its first birthday on October 18, it will
likely do so with more than $540 million in AUM. To be precise,
EEMV had $544.1 million in AUM as of the close of trading
What is truly noteworthy about this ETF is that with an
expense ratio of just 0.25 percent, the fund is far cheaper than
iShares MSCI Emerging Markets Index Fund (NYSE:
) and not much pricier than the Vanguard MSCI Emerging Markets
). More importantly, EEM and VWO are up an average of 9.5 percent
this year, but EEMV is up 15.2 percent.
WisdomTree Europe Hedged Equity Fund (NYSE:
Earlier this year, the WisdomTree Europe Hedged Equity was
restructured. The new version of this ETF dramatically slashed
exposure to financial services names (now less than eight percent
down from over 20 percent) while focusing on European dividend
payers that derive the bulk of their revenue from outside the
Now, HEDJ devotes a combined 34.6 percent of its weight to
staples and health care, highlighting the fund's conservative
nature. The ETF is not yet big in terms of assets, but growing to
$21.7 million as of October 15
from under $13 million on September 7
is impressive on a percentage basis.
FlexShares Morningstar Global Upstream Natural Resources
Index ETF (NYSE:
The FlexShares Morningstar Global Upstream Natural Resources
Index ETF shares a couple of things in common with the
aforementioned EEMV. First, the FlexShares fund entered a niche
littered with competition. Simply put, there is no shortage of
resources ETFs on the market offering exposure to the likes of
Exxon Mobil (NYSE:
), BP (NYSE:
) and BHP Billiton (NYSE:
Second, GUNR destroyed the notion that new ETFs need time to
mature as if new funds are a fine bottle of Bourdeaux. GUNR is
about 13 months and has already accumulated $526.8 million in
AUM. The fund is up nearly 8.2 percent in the past 90 days.
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