ETF Ranks Continue to Swell in October

December 1, 2003 ( - Exchange-traded funds continued to enjoy strong investor support in October, swelling by more than $9 billion, according to an industry report.

Most of the $9.13 billion increase in exchange-traded funds, or ETFs, came from equity index ETFs, which grew by $9.02 billion to $124.57 billion during the month, according to the Investment Company Institute.   Assets of all exchange-traded funds grew to $128.89 billion in October.

Bond index ETF assets increased by $115 million to $4.32 billion during the month, while assets of domestic equity ETFs increased by $7.85 billion, and international equity ETF assets increased by $1.17 billion.

An exchange-traded fund is an investment company with shares that trade intraday on stock exchanges at market-determined prices. Investors may buy or sell ETF shares through a broker just as they would the shares of any publicly traded company (see  Black Box: Exchange-Traded Funds ).

Exchange “Changes”

During October, the value of all ETF shares issued exceeded that of shares redeemed by $1.69 billion. Equity index ETFs experienced a positive net issuance of $1.51 billion, while bond ETFs experienced a positive net issuance of $179 million, according to the ICI.

Gross issuance of all ETFs decreased in October to $7.58 billion from $10.90 billion in September, while redemptions decreased to $5.88 billion from $6.88 billion in September (see  ICI: ETFs Add $2.45 Billion in New Assets in September ).

Seventy ETFs tracked domestic stock indexes in October, with assets of $114.03 billion. Forty-one ETFs tracked international equity indexes and held assets of $10.53 billion, while five ETFs tracked bond indexes in the ICI report.