The scale of ETFs in the US has grown from $1 trillion to $10 trillion in just 14 years. This year alone, investors have poured $691 billion into ETFs, signaling a significant shift in Wall Street's investment landscape.
On September 27, data compiled by Bloomberg showed that US ETFs surpassed the $10 trillion mark for the first time, driven by both capital inflows and market gains. Investors have contributed $691 billion to ETFs this year, with US stock indices consistently hitting new highs.
ETFs, known for their ease of trading, high liquidity, tax benefits, and low management fees, have become increasingly popular among investors. This has led to a decline in the assets of traditional mutual funds. Additionally, the rise of low-cost products has resulted in a significant drop in fee income for fund managers, while ETF issuers have attracted investors by offering more complex strategies.
Amrita Nandakumar, president of Vident Asset Management, described the growth of ETFs as "incredible", noting the rapid increase from $1 trillion to $10 trillion in just 14 years. She highlighted that ETFs now cover almost all types of assets and investment strategies, which were previously accessible only to the world's most sophisticated institutional investors.
Currently, there are nearly 3,800 ETF products in the market, and the ETF sector is on track to break records in terms of new launches and inflows. Vanguard Group Inc. has captured 32% of all inflows, marking its third-best year in history. Actively managed ETFs and those using derivatives or leverage represent 80% of new product listings, as issuers innovate to gain market share.
Jillian DelSignore, head of global investor distribution strategy at Nasdaq Global Index Group, stated that ETFs are becoming the preferred tool for investors. As the private market evolves and result-oriented strategies develop, new investment opportunities will continue to emerge.
