Exchange-traded funds (ETFs) and exchange-traded products (ETPs) attracted $41.4 billion of net new assets globally in this year's first quarter, more than double the year-earlier period, according to BlackRock.
All told, global assets under management in ETFs increased 6.7% in the first quarter, and now total $1.4 trillion.
"Net inflows in the first quarter indicate that the ETF/ETP industry is off to a much faster start this year, since the quarter is historically slow in terms of net new assets," said Deborah Fuhr, global head of ETF research and implementation strategy at BlackRock, which manages the iShares family of ETFs.
In the U.S., there were 53 new ETFs launched during the first quarter, a 5.9% jump over the year-earlier period, according to a BlackRock report. Among the 949 ETFs in the U.S., the top 100 had more than 81% of total assets.
The company says its iShares group was the largest ETF provider in terms of products and assets as of the first quarter, with 218 ETFs, $450.1 billion AUM and a 47.4% market share. State Street Global Advisors was second with a 19.6% market share, followed by Vanguard's 17.3% market share. Together, these three ETF families--out of 29 total--accounted for 84.3% of U.S. ETF assets.
And the field will get more crowded. BlackRock said it expects 23 firms in the U.S. to launch their first ETF in the future.
Global investment markets in the first quarter were affected by numerous events, including political unrest in the Middle East and northern Africa, weather events throughout the world, and the earthquake and tsunami in Japan.
Net outflows of ETF assets occurred in broad emerging markets and China at the beginning of the quarter, but turned into net inflows in March, BlackRock reported. Additionally, products tracking Brazil, Russia, South Korea, and Taiwan attracted net inflows during the quarter.
Products focused on Japan, particularly those tracking the MSCI Japan Index, showed extreme activity during the month as investors tried to manage the effects of the earthquake and tsunami.
Inflation concerns were another factor that drove ETF investments. "Inflation worries generated considerable interest in products providing exposure to indices covering broad commodities, high-dividend paying stocks, high-yield fixed income, gold and real estate," Fuhr said.
Net inflows toward products providing exposure to energy commodities reflected investor efforts to cash in on price increases caused by the unrest in the Middle East and North Africa. BlackRock expects these levels to subside as regional turbulence and violence ends and energy prices move back to a more normal level.
Average global daily trading volume during the first quarter was $72 billion, a 20% jump from the year-earlier period. The U.S. accounted for $64.1 billion of that amount.