BlackRock, Inc. announced today that its iShares business led the global exchange traded funds (ETF) industry by winning $130bn in new flows in 2015, or a 13% annual organic growth rate…..
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BlackRock set new growth records in the U.S. ($97 billion vs. $82 billion in 2014) and Europe ($34 billion vs. $20 billion in 2014), and won 42% of flows in both markets. The overall industry expanded at a record-breaking $347bn in 20151.
Mark Wiedman, Global Head of iShares at BlackRock, commented: “Despite lackluster equity markets in 2015, the global ETF industry set a new growth record of $347bn. Institutional and retail investors are using ETFs more and more, whether as tools to express a view on almost any financial market, or for long-term core investments.”
More investors use bond ETFs to help access fixed income markets
Wiedman continued: “Bond ETFs had an exceptionally strong 2015, growing at 22% annual organic growth rate globally. Bond ETFs enable retail and institutional investors to access the bond markets at known, transparent prices and with impressive liquidity. iShares won $50bn globally, 54% of all new flows into bond ETFs. During quiet times and volatile times in 2015, iShares bond ETFs performed as clients have come to expect.”
Investors accelerate use of ETFs as substitutes for futures and swaps
“Institutional investors accelerated the use of ETFs as substitutes for futures and swaps in 2015. As banks’ balance sheet costs have ratcheted up, so too has the cost of using futures and swaps. ETFs are now typically a more efficient substitute for major global equity indices and for bond indices like credit derivatives. For instance, S&P 500 futures averaged 56 bps over the last year, while our iShares Core S&P 500 ETFs in the U.S. and Europe (LN: CSPX) only cost 7 bps.”
Rachel Lord, Head of EMEA iShares at BlackRock, added: “ETF uptake amongst European investors shows no sign of abating. Our 2015 net inflows reached $34bn, accounting for 42% of the industry flows in the region. This was largely driven by investors seeking fixed income and European equity exposures.
“Over the course of the year, we established a variety of product and distribution partnerships with private banks, brokerage firms and wealth managers across the region – a strong indication that advisers and asset allocators are increasingly looking to ETFs as the most cost-efficient, flexible building blocks for their client portfolios, in a fee-based environment.
“Underlying these developments has been an ongoing commitment to making the financial ecosystem on which ETF trading relies as effective as possible. This has included transitioning more of our funds onto the international clearing and settlement system we pioneered to reduce frictional costs of trading, and working with platform providers to make access to ETFs easier for retail investors.”
iShares global AUM exceeded $1 trillion as of December 31, 2015.
1 All data as of 12/31/15. Source: BlackRock.
2 Sources: BlackRock, Goldman Sachs, Bloomberg, as of 11/20/2015.