Except for Japan, the growth in ETF assets is looking a little stale compared to the rest of the world. But on the plus side, U.S. investors still enjoy some of the best bargains to be found.

At least that’s what a new Barclays Global Investors study reveals. The research team led by Deborah Fuhr found that total U.S. assets in the ETF market hit an all-time high of $582 billion at the end of the second quarter, its highest mark since December 2007.

Interestingly, however, the number of U.S. ETFs, pegged at 706 from some 22 providers on three exchanges, is smaller than its European counterparts, which account for 753 ETFs for assets estimated at $183 billion.

According to Barclays, U.S. ETF assets have risen by more than 17 percent on the year – which is more than the 10 percent rise seen in the MSCI U.S. Index in dollar terms in the same period – but it’s particularly notable when compared to the modest 1.1 percent rise in the number of new ETF launches.

While assets bloomed significantly, average daily trading volume in U.S. dollars dropped 26 percent on the year to an estimated $57 billion.

Globally, total ETF assets ballooned to $857.5 billion by the end of the quarter, exceeding for the first time since 2007 its highest mark of $796.7 billion reached that year.

Topping the list with most assets under management worldwide was the SPDR S&P 500 (NYSEArca: SPY), with a total of roughly $69.38 billion.

The ETF, which turned 16 years old this year, has grown to be the largest ETF globally and the most liquid equity security traded in the world.

The findings by Fuhr are essentially in line with other end-of-August data compiled by the National Stock Exchange and SSgA. (See full story here.)

But what really sticks out is that despite some nice growth numbers in the U.S., the rest of the world keeps pumping up the volume on its ETF activity even more.

In the latest BGI research, Fuhr’s numbers show that:

• Globally, ETF assets jumped some 25.3 percent by the end of August. That’s more than 3 percentage points better than the U.S. this year.
• Europe (34.7 percent), Asia ex-Japan (39.1 percent) and Latin America (35.4 percent) all are handily surpassing the U.S. asset growth rate in 2009.
• Japan is the lone laggard at -6.9 percent ETF asset losses for the year.

At the same time, Fuhr’s data indicate that average expense ratios between ETFs in Europe and the U.S. aren’t all that different, broadly speaking.

On the low side, European ETF providers charge around 0.19 percent for currency funds and 0.16 percent for a typical bond portfolio. For regional exposure similar to what we’d think about in the U.S. as domestic index-tracking ETFs, investors in Europe average paying expense ratios of between 0.23 percent (for euro zone stocks) and 0.35 percent (across a wider assortment of European companies).

For U.S. stock exposure, European ETF investors are paying ERs of around 0.38 percent. But, to own commodity funds (0.45 percent), alternative-types of ETFs (0.65 percent) and emerging markets stocks (0.63 percent), it gets a little more expensive. (To gain U.S. sector exposure, Europe’s providers charge around 0.72 percent for their ETFs.)

That’s not too much more than ETF expense ratio rates in the U.S. But the big difference comes when comparing how much a mutual fund investor must pay on the two continents.

In Europe, an actively managed stock mutual fund focused on domestic stocks will run you an average of 1.75 percent. And an actively managed international equity mutual fund typically assesses ERs of around 1.73 percent.  Over here, investors are charged an average 1.41 percent for domestic-focused, actively managed mutual funds while the ER for international funds is 1.56 percent.

As my colleague Murray Coleman points out in a blog for our sister European site, it’s likely many of the new converts to ETFs overseas are diversifying away from all-stock portfolios.

Yet, with such an expense differential between mutual funds and ETFs still existing in developed markets like Europe, it’s no wonder that experts foresee higher growth rates for ETF assets in other parts of the world.

Although a lot of work still needs to be done on ERs domestically, BGI’s latest report shows that U.S. fund investors are still relatively fortunate – at least compared to what they’re getting docked to own mutual funds in other countries.

Cinthia Murphy is associate editor at IndexUniverse.com. She welcomes comments and suggestions for future blogs at: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .