BlackRock set new growth records in the U.S. ($97 billion vs. $82 billion in 2014) and Europe ($34 billion vs. $20 billion in 2014), and won 42% of flows in both markets. The overall industry expanded at a record-breaking $347bn in 2015.

Mark Wiedman, Global Head of iShares at BlackRock, commented: “Despite lacklustre equity markets in 2015, the ETF industry set a new growth record of $347bn. Institutional and retail investors are using ETFs more and more, whether as a tool to express a view on almost any financial market or for long-term core investments.”

More investors use bond ETFs to access fixed income markets

Wiedman continued,“Bond ETFs had an exceptionally strong 2015, growing at 22% organic growth rate. Bond ETFs enable retail and institutional investors to access the bond markets at known, transparent prices and with impressive liquidity. iShares won $50bn globally, 54% of all new flows into bond ETFs. During quiet times and volatile times in 2015, iShares bond ETFs performed as clients have come to expect.”

Investors accelerate use of ETFs as substitutes for futures and swaps

“Institutional investors accelerated their use of ETFs as substitutes for futures and swaps in 2015. As banks’ balance sheet costs have ratcheted up, so too has the cost of using futures and swaps. ETFs are now often a more efficient substitute for major global equity indices and for bond indices like credit derivatives. For instance, S&P 500 futures averaged 56 bps over the last year, whereas the same exposure through one of our ETFs only cost 7 bps[2].”

Susan Chan, Head of Asia Pacific iShares at BlackRock, added: “Across the Asia Pacific region, a broad range of institutions increased their usage of ETFs – insurers, sovereign wealth funds, asset and wealth managers. Retail demand deepened in our fast-growing Australian business.”

“Asia Pacific investors continued to turn to our two global product lines for liquidity and access to global markets. Asia Pacific investors purchased $12 billion in U.S. and European-domiciled iShares in 2015.”

Jon Howie, Head of iShares Australia commented: “In Australia, the adoption of ETFs by self-managed super funds and individual investors continued to grow in 2015, reflecting their efficiency as a way to build diversified investment portfolios. This has boosted the liquidity of ETFs on the ASX, which in turn, is contributing to greater institutional usage of ETFs in Australia.”

iShares global AUM exceeded US$1.1 trillion as of December 31, 2015.

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[1] All data as of 12/31/15.   Source: BlackRock.
[2] Sources: BlackRock, Goldman Sachs, Bloomberg, as of 11/20/2015.

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