The US exchange traded fund business could more than double in the next five years to over US$3.5 trillion, according to BlackRock’s iShares.
US ETF assets, which are at US$1.5 trillion, will increase with expanded use among financial advisers, self-directed investors, institutional clients and retail investors, according to the report.
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Innovations in fixed-income ETFs as well as the creation of ETFs that offer low volatility will also spur growth, the firm said.
According to a press release from iShares, the company says half of institutional ETF users expect to increase their ETF use by 2014. And iShares reports that more retail and institutional investors are adding ETFs as core exposures.
In addition, iShares says it expects fixed-income ETFs to grab bigger market share, and that the ETF industry will keep rolling out new products that give investors innovative exposures to the financial markets.
Mark Wiedman, global head of iShares, said: "In the last decade, ETFs have evolved from obscurity, to a US$2+ trillion industry. But these are still early days in ETF adoption."
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By GlobalDataAccording to data from the Washington-based Investment Company Institute, ETF assets in the US increased 24% to US$1.47 trillion in the 12 months ended 30 April 2013, compared with an increase of about 11% for mutual funds, which hold US$13.9 trillion.
