With 2003’s asset inflow, ETFs saw total assets under management swell to $211 billion, data from Morgan Stanley revealed. Morgan Stanley attributed much of ETFs success to the broad-based equity market rally combined with late-trading and market-timing scandals that rocked mutual funds (See Keeping Up With the Trading Scandal ), according to a Reuters report.
While the United States remained the number one market in terms of total assets under management, with $150.7 billion, great strides were made in other markets last year. Europe’s total assets invested in ETFs increased 83% to $19.5 billion, and Japan’s ETF assets rose by nearly a third to $27.6 billion.
Additionally, trading volumes in ETFs were on the rise last year. The average daily volume was up 19% to 170 million shares globally.
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 ).