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Investors plowed record $183 billion in ETFs in 2012

January 11, 2013: 2:35 PM ET
Investors poured a record $183 billion into ETFs in 2012.

Investors poured a record $183 billion into ETFs in 2012.

U.S. investors plowed a record $183 billion into U.S.-listed exchange traded funds last year, surpassing the previous record of $178 billion set in 2008, according to State Street data.

"Last year's impressive overhaul amounts to yet another clear sign that ETFs are not only here to stay, but are increasingly chipping away at the dominance of mutual funds," said Olivier Ludwig, managing editor at IndexUniverse, which also tracks ETF assets.

Like mutual funds, ETFs, or exchange-traded-funds, offer exposure to a wide array of investments, from the broad stock and bond markets to individual sectors. But they're often cheaper and more tax friendly than traditional funds. ETFs can also be bought or sold at any time of day since they trade like stocks.

Related: Individual investors have insatiable appetite for ETFs

The world's largest ETF, the SPDR S&P 500 ETF (SPY), remained the most popular among investors, who poured nearly $16 billion into the fund in 2012.

Emerging market ETFs were also among the most successful. Both the Vanguard and MSCI Emerging markets ETF (VWO) and the iShares MSCI Emerging Markets ETF (EEM) pulled in more than $10.5 billion each.

And bond ETFs raked in $56 billion, or about 30% of all total assets, last year, with iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD), iShares  iBoxx $ High Yield Corporate Bond ETF (HYG) and the Pimco Total Return Fund ETF (BOND) among top 10.

In fact, Pimco's Total Return ETF, which debuted in March 2012 and is managed by Pimco founder and chief investment officer Bill Gross, ended the year with nearly $3.9 billion in assets, making it the second-most successful ETF launch in history after the 2004 entrance of the SPDR Gold ETF (GLD).

Overall, ETFs ended 2012 with more than $1.3 trillion in assets, nearly 30% higher from a year earlier.

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