By Global ETF Industry Surpasses .5 Trillion Mark
The exchange-traded fund (ETF) industry achieved a remarkable feat at the end of June, with global assets surpassing $10.5 trillion. In data provided by consultancy ETFGI to Financial News, it was revealed that the industry’s assets had grown from $10.32 trillion in May, marking a new all-time high.
Steady Increase in Global Assets
The data from ETFGI further highlights that global assets have seen a substantial increase of 13.5% this year alone. Starting at $9.26 trillion towards the end of 2022, the industry has experienced significant growth in a relatively short period.
Continuous Inflows of Capital
June witnessed another milestone for the ETF sector, as it attracted $103 billion in new investments. This impressive figure indicates the 49th consecutive month of inflows. Since the beginning of the year, ETFs have amassed a staggering $376.2 billion globally.
Widespread Adoption of ETFs
Deborah Fuhr, managing partner at ETFGI, expressed her observations on the widespread adoption of ETFs worldwide. Not only are large institutional investors and financial advisers utilizing these funds, but retail investors also recognize their value. ETFs are being increasingly utilized for both index exposure and active investment purposes.
Active ETFs Becoming Prominent
Prominent US asset managers such as JPMorgan Asset Management, Fidelity Investments, and American Century have started offering active ETFs, indicating a growing trend in the market. Additionally, Dimensional Fund Advisors converted seven traditional active mutual funds into ETFs, transferring over $44 billion in assets between 2021 and 2022. Following suit, Dimensional recently filed with the Securities and Exchange Commission to offer ETF share classes for its existing mutual funds.
Vanguard’s Influence and Patent Expiration
Vanguard, a leading US asset management giant, had pioneered the concept of offering ETF share classes for existing mutual funds, holding the patent for this approach since 2001. However, as of May, the patent has expired, allowing other asset managers to adopt this strategy.
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