Despite a rough first quarter, ETFs continue to gain marketshare against other mutual funds in five channels. Yet in two other channels, ETFs are backsliding. Broadridge's just-released Fund Distribution Intelligence
fund flow data for Q1 2016 show negative net new asset numbers for ETFs in three of seven channels and for long-term (i.e. non-money-market) traditional mutual funds in three of seven channels. And only two of those seven channels grew its total AUM (ETFs plus long-term mutual funds) year-over-year.
| Frank Polefrone|
Senior Vice President of Product Development
"Even in the volatile markets, the independent channels continued to add to ETFs," Frank Polefrone
, senior vice president of data analytics at Broadridge's AccessData
, tells MFWire
. "We see a big shift going on."
Discount brokerages brought in $3.7 billion in net new ETF assets and $29.7 billion in net new long-term mutual fund (Broadridge calls them LTMFs) assets in Q1 2016. Meanwhile, year-over-year, ETFs' marketshare in the discount brokerage channel fell 11 percent to 37 percent of non-money-market mutual fund AUM, though the channel remains ETFs' strongest (in terms of percentage of AUM). And the channel boomed over the last 12 months, increasing total AUM (ETFs plus LTMFs) by 47 percent to $322 billion as of the end of Q1 2016.
ETFs also appear to be losing a little ground in the private bank channel. Year-over-year, ETFs' marketshare in that channel fell three percent to 23 percent of AUM. In terms of Q1 2016 flows, the private bank channel added $12.6 billion in net new LTMF assets but subtracted almost as much, $12 billion, in net new ETFs. Meanwhile, the private bank channel shrunk 10.4 percent year-over-year to $1.389 trillion.
On the flip side, the RIA channel is where ETFs are gaining ground the fastest. Year-over-year, ETFs' marketshare with RIAs rose four percent to 27 percent of AUM. In terms of Q1 2016 flows, RIAs added $1.1 billion in net new ETF assets but subtracted $13.8 billion in net new LTMF assets. The RIA channel is also the only other one that grew in the last 12 months; year-over-year, RIA AUM in ETFs and LTMFs rose four percent to $2.165 trillion.
The wirehouse channel suffered big negative net new ETF assets of $13.1 billion in Q1 2016, and even bigger negative net new LTMF assets of $21.8 billion. Year-over-year, ETFs' wirehouse marketshare rose three percent to 25 percent. The channel shrunk 6.4 percent over the past 12 months to $1.605 trillion.
Over the past 12 months ETFs increased their independent broker-dealer channel marketshare by two percent to 20 percent of AUM. In Q1 2016 IBDs added $11.7 billion in net new ETF assets while subtracting $36.7 billion in net new LTMF assets. The channel shrunk 2.4 percent year-over-year to $2.097 trillion.
ETFs' bank channel marketshare increased one percent year-over-year to 27 percent of AUM. In Q1 2016 banks subtracted $10.8 billion in net new ETF assets while adding just $100 million in net new LTMF assets. The channel shrunk 5.8 percent year-over-year to $994 billion.
In the trust company channel, like in the bank channel, ETFs' marketshare also rose one percent year-over-year to 16 percent of AUM, yet it remains ETFs' weakest channel (as measured by percentage of AUM). Trust companies added $4.5 billion in net new ETF assets last quarter and $19.5 billion in net new LTMF assets. Year-over-year the channel shrunk 4.1 percent to $1.014 trillion.
Across all seven third-party distribution channels, ETFs' marketshare rose two percent year-over-year to 24 percent of AUM.
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