ETFs boom in past year with 50 per cent growth

Three exchange traded funds (ETF) providers dominate the sector holding 80 per cent of a market which has grown by more than 50 per cent in the last 12 months.

According to data released by Plan for Life funds under management (FUM) in the ETF and exchange traded commodities sector leaped ahead significantly in the last year, growing 51.6 per cent to $11.71 billion spread across 93 products.

iShares currently holds more than a third of the market by FUM with $4.16 billion, or 35.5 per cent, followed by State Street with $3.44 billion, or 29.3 per cent. Long term industry presence Vanguard is ranked third, with $1.97 billion, or 16.8 per cent of the market. Collectively the three managers hold 81.6 per cent of the ETF market.

Vanguard was notable for the fact that its' annual growth in FUM was 100.2 per cent compared with 72 per cent for iShares and 16.1 per cent for State Street. However all these were eclipsed by Betashares, which holds 9.2 per cent of market and which recorded annual growth of 143.3 per cent.

Much of this was driven by a single fund offered by Betashares — its' Australian High Interest Cash ETF which recorded growth of 233.7 per cent.

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Other managers to record sizeable shifts were UBS Global Asset Management and Market Vectors which grew their market share by 386.3 per cent and 100 per cent respectively. While this growth was significant both are still small players with less than one per cent of the market and FUM of $54.48 million and $20.54 million respectively.

The ETF sector has grown from around $1 billion in FUM in 2006 and took five years to reach $6 billion by mid 2011 before doubling again to nearly $12 billion in only three years.