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Exchange-traded funds experienced record inflows in 2008, despite the most challenging market environment in recent memory.
Investors poured more than $178 billion in new money into ETFs for the year, according to data from the National Stock Exchange. For comparison, Emerging Portfolio Funds Research says that investors pulled $320 billion out of conventional mutual funds over the same time period.
Despite the inflows, total assets under management for the U.S. ETF industry fell by 13 percent over year-ago levels, to close at $539 billion.
Trading volume soared, however, rising 70 percent over 2007 levels, which was itself up 114 percent over 2006. ETFs now account for 30–40 percent of the total daily traded volume in the U.S. equity market.
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