The snowball of ETF asset growth is speeding up, thanks in large part to investors' obsession with cost.
We all took pause when the U.S. ETF market hit a record $287.5 billion in net creations in 2016. But consider that the asset haul on a trailing 12-month basis is currently $466.4 billion, according to Bloomberg data.
That's right. The ETF market has gathered nearly half a trillion dollars in the past 12 months alone. If this pace holds, the industry will hit that $500 billion-a-(trailing)-year mark before the summer is over. That figure is practically double what it was a year ago, and it's something the industry has never really seen before.
It has also helped push the U.S. ETF market across the $3 trillion-in-total-assets mark this week. This is massive growth, and it could very well be the new normal.
"You could say Trump kicked this off, and in the post-election euphoria, ETFs have gone from gathering $1 billion a day to $2 billion-$3 billion a day regularly," said Eric Balchunas, senior ETF analyst at Bloomberg. "But it's much deeper than the Trump trade now. There's a tipping point where advisors are switching over, institutions are using more ETFs because they are more liquid. There's more at play."