The Markets November 8, 2010

ETFs End October at $925 Billion

ETF industry assets rose $39.9 billion last month, up 4.5%, to $925 billion, according to the latest data from State Street Global Advisors (SSgA).
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Gains in the International category accounted for 36% of the total gain in ETF AUM, State Street said in a news release. Currency remains the only category with negative AUM growth YTD.

Large Cap assets rose the most for the month – $ 4.7 billion – followed by Large Growth, Mid Cap, and Allcap. Technology rose $1.7 billion, or 16.2%.

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The top three managers in the U.S. ETF marketplace were: BlackRock, State Street, and Vanguard. Collectively, they accounted for approximately 84% of the U.S. listed ETF market, the news release said.

The top three ETFs in terms of dollar volume traded for the month were the SPDR S&P 500 [SPY], PowerShares QQQ [QQQQ], and iShares Russell 2000 [IWM]. Meanwhile, the top three ETFs in terms of assets for the month were the SPDR S&P 500 [SPY], SPDR Gold Shares [GLD], and iShares MSCI Emerging Markets [EEM].

The Technology Select Sector SPDR ETF [XLK] had inflows of $1 billion, followed by the SPDR S&P Dividend ETF [SDY] with $721 million.

Products November 8, 2010

ING Expands Profit Sharing 401(k) Product

ING DIRECT's ShareBuilder 401k expanded its profit sharing 401(k) plan to allow small-business owners to award different levels of contributions to their employees based on group-specific criteria.
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Previously, ShareBuilder 401k offered a standardized advanced profit sharing plan that was limited to two tiers of allocations. The enhanced plan offers the flexibility to create as many tiers as appropriate for each business, according to ING.

“Traditional profit sharing plans award the same percentage of employer contributions to each employee based on their annual salary,” said ShareBuilder 401k General Manager Stuart Robertson, in the news release. “By contrast, advanced profit sharing 401(k) plans give employers more flexibility in allocating different percentages of contributions to different levels of employees based on skill sets, age or other important criteria.”

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According to the news release, ShareBuilder 401k provides small businesses with two primary ways to structure a tiered profit sharing 401(k) plan.  

  • The first is a “new comparability” structure that sorts employees into different groups based on income or other clearly-defined criteria of which compensation is a component. Partnerships, such as law firms, are perhaps best-suited for tiered profit sharing plans as they’re comprised of clearly-defined groups of employees.  
  • The second is called “age-weighted” structure which uses each participant’s age as the primary factor for allocation with older employees receiving the highest percentage.

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