Exchange traded funds and exchange traded products – two index-based investment vehicles that have surged in prominence over the past decade or more – gathered a record $199 billion in net new assets through the end of the third quarter of this year.

Exchange traded funds and exchange traded products – two index-based investment vehicles that have surged in prominence over the past decade or more – gathered a record $199 billion in net new assets through the end of the third quarter of this year. That surpassed the previous high of $185.8 billion set in the first three quarters of 2012.

The data, from ETFGI, an independent research house, said that the global ETF/ETP industry has 5,463 ETFs/ETPs, with 10,510 listings, assets of $2.6 trillion from 225 providers listed on 61 exchanges.

ETFs are typically open-ended, index-based funds, with active ETFs accounting for less than 1 per cent market share. They can be bought and sold like ordinary shares on a stock exchange and offer broad exposure across developed, emerging and frontier markets, equities, fixed income and commodities. Exchange traded products are products that have similarities to ETFs in the way they trade and settle but do not use an open-end fund structure. The use of other structures including unsecured debt, grantor trusts, partnerships, and commodity pools by ETPs can, in addition to a significantly different risk profile, create different tax and regulatory implications for investors when compared to ETFs, which are funds.

Year-to-date net new asset flows reached record levels for the sectors in Japan at $15.0 billion, Europe at $47.4 billion, and globally at $199.0 billion.

“In September investors invested the majority of net new money into North American equity exposures. Due to the on-going situation in the Ukraine, Scotland’s referendum vote, and the Bank of England Governor’s statement that a rate increase was “getting closer”, investors reduced their exposure to Europe. The unfavourable geopolitical environment caused the S&P 500 to decline 1 per cent in September. Developed markets declined 4 per cent while emerging markets declined 7 per cent.” according to Deborah Fuhr, Managing Partner at ETFGI.

iShares is the largest ETF/ETP provider in terms of assets with $980.3 billion, reflecting 37.3 per cent market share; SPDR ETFs is second with $431.6 billion and 16.4 per cent market share, followed by Vanguard with $406.8 billion and 15.5 per cent market share. The top three ETF/ETP providers, out of 225, account for 69.3 per cent of Global ETF/ETP assets, while the remaining 222 providers each have less than 4 per cent market share.