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ETF Assets Dip Below $90 Billion After May Highs

John Spence
Tuesday, July 30, 2002

After clearing the $90 billion asset plateau for the first time in May, combined assets of the 102 exchange-traded funds listed in the U.S. fell to $88.95 billion in June, according to the latest figures from the Investment Company Institute.

Total ETF assets decreased by $3.85 billion in June, during which time the S&P 500 index dropped by over 7 percent. ETFs hitched to domestic benchmarks lost nearly $4 billion in assets, while those tied to international indexes gained nearly $1 billion, according to the ICI. The table below shows total net assets of U.S.-listed ETFs, most of which trade on the American Stock Exchange, going back to the beginning of 2001.

Month	ETF assets ($MM)
January 2001	72,134
February	64,343
March	66,006
April	73,330
May	72,773
June	75,559
July	75,520
August	72,085
September	64,345
October	69,421
November	78,846
December	82,993
January 2002	82,009
February	80,891
March	88,203
April	85,859
May	92,804
June	88,951

The value of ETF shares issued exceeded that of shares redeemed by $3.98 billion in June, according to the ICI.

Value of shares issued and redeemed by all ETFs ( in millions of dollars)
	June 2002	May 2002	YTD-02	YTD-01
Gross Issuance	8,228	12,697	43,875	41,720
Gross Redemptions	4,247	3,789	21,559	24,423
Net Issuance	3,981	8,908	22,316	17,297

A Global View

Boston-based indexing giant State Street Global Advisors (SSgA) keeps tabs on ETFs that trade around the world, of which there are currently 257. The number of U.S.-domiciled funds increased to 106 with Friday's launch of four fixed-income iShares. Barclays Global Investors (BGI) said its new bond ETFs have already raked in a cool $3 billion in assets as of the end of trading yesterday. The timing of the launch appears fortuitous as nervous investors continue to flee sagging stock funds for bonds.

There are currently 21 global ETF providers managing over $115 billion in assets, according to SSgA. The four big domestic ETF players are SSgA, BGI, Bank of NY, and relative newcomer Vanguard. Vanguard offers two VIPERs with over $1 billion in assets combined.

San Francsico-based BGI is the largest global ETF provider in terms of number of funds (109), while SSgA is the asset king. However, BGI has been gaining market share ground in 2002.

Global ETF Managers - Funds, Assets, and Market Share
Fund Manager	# funds	Assets	Market Share
State Street	47	$38,743,701,162	33.6%
Barclays Global	109	$29,133,738,600	25.3%
Bank of NY	2	$25,174,229,050	21.9%
Vanguard	2	$1,006,217,430	0.9%
AXA Gestion	12	$240,013,638	0.2%
Benchmark Asset Mgt Co	1	$1,761,140	0.0%
Credit Lyonnais	2	$442,512,450	0.4%
Credit Suisse	1	$701,364,863	0.6%
Daiwa Asset Mgmt.	6	$1,753,242,621	1.5%
IndexChange	31	$2,857,713,704	2.5%
IndexCO	3	$495,158,360	0.4%
Merrill Lynch LDRs	2	$1,248,121,575	1.1%
Nikko Asset Mgmt.	2	$825,929,372	0.7%
Nomura Asset Mgmt.	7	$9,941,474,816	8.6%
Ofek Leumi	1	$388,430,499	0.3%
OM Group	1	$70,018,193	0.1%
Seligson	1	$10,340,983	0.0%
Merrill Lynch & Societe Generale LDRs	13	$296,472,135	0.3%
Societe Generale	4	$1,422,933,822	1.2%
TD Securities	4	$154,023,583	0.1%
UBS Asset Mgmt. Ltd.	6	$262,931,237	0.2%
Totals:	257	$115,170,329,234	100.0%

The table below shows the same data for the domestic ETF providers.

Domestic ETF Managers - Funds, Assets, and Market Share
Fund Manager	# funds	Assets	Market Share
State Street	21	$34,425,762,860	40.0%
Barclays Global	81	$25,455,461,890	29.6%
Bank of NY	2	$25,174,229,050	29.3%
Vanguard	2	$1,006,217,430	1.2%
Totals:	106	$86,061,671,230	100.0%