The global ETF scale has reached a new high. At the end of February 2024, it reached $12.3 trillion, marking 57 consecutive months of net inflows.
In the first two months of this year, global ETFs attracted a net inflow of $253.04 billion. Among them, active ETFs attracted a net inflow of 46.12 billion US dollars, surpassing the full year of 2023.
Technology ETF Strong Gold Attraction
According to data from ETFGI.com, the ETF tracking website, as of the end of February 2024, the total number of ETF products in the global market was 12063, with a total size of $12.3 trillion.
From a market perspective, the total size of US ETFs exceeds 8.5 trillion US dollars, reaching a new high. Among them, the Anshuo core S&P 500 ETF under the giant BlackRock attracted $16 billion in gold in the first two months of this year, with the latest scale reaching $446.5 billion.
With the rise of technology stocks, the S&P 500 index is showing a trend of tilting towards the information technology industry, making information technology the largest heavy holding industry in the index. Pioneer Navigation S&P 500 ETF, which also tracks the S&P 500, has gained funding favor, with a latest scale of $428.9 billion, attracting a net inflow of approximately $16 billion in the first two months.
In addition, BlackRock's Bitcoin spot ETF IBIT has attracted a net inflow of approximately $7.1 billion since its establishment in January 2024; The current scale exceeds 16 billion US dollars.
In the first two months of 2024, Jingshun's ETF QQ, which tracks the Nasdaq 100, attracted $7.1 billion, with the latest scale of $251.7 billion.
Another technology oriented ETF, Pioneer Navigation Information Technology ETF VGT, attracted $6.3 billion in capital inflows in the first two months of this year. This ETF tracks the MSCI US Investable Market Information Technology 25/50 Index, with a latest size of $64.6 billion.
Where does the growth momentum of ETFs come from? ETF.com believes that in recent years, insurance companies and institutional investors such as pension funds have become increasingly accustomed to strategic or tactical allocation through ETFs, which has become the foundation for the stable growth of the ETF industry. In addition, the reasons why investors choose ETFs also include the uniqueness, innovation, transparency, decentralization, tax advantages of the strategy, etc; At the same time, lower rates are also an important reason for ETF to attract funds.
ETFs will continue to expand
Institutions are very optimistic about the growth prospects of ETFs. According to data from Morgan Asset Management, as of the end of 2023, the total size of global ETFs is approximately $12 trillion. According to the institution's prediction, the managed size of global ETFs may exceed $20 trillion by the end of 2027.
According to Morgan Asset Management's statistics, by asset category, as of the end of 2023, among global ETFs, equity ETFs had the largest scale, accounting for 76%, fixed income ETFs accounted for 19%, and other products accounted for about 5% of the total scale.
From the inflow of funds in 2023, equity ETFs accounted for the highest proportion of net inflows, reaching 57%. Fixed income ETFs contributed 41% of the net inflows, while other types accounted for 2%. Compared to the scale of various products themselves, fixed income ETFs have made a disproportionate contribution to net inflows.
Overall, the importance of ETFs in customer portfolios is increasing in both the US and European markets. For example, at the end of 2017, the ratio of the size of US ETFs to mutual funds excluding ETFs was 19:81; By the end of 2023, this ratio will become 30:70. The European market has shown a similar trend, with a ratio of 8:92 in 2017; By the end of 2023, this ratio will become 15:85.
Morgan Asset Management believes that there are three driving forces behind global ETF growth. Firstly, it is a broad customer base; Secondly, fixed income ETFs have broad growth potential, and this investment tool, which was previously limited to institutional use, is now widely used by individual investors; Finally, more and more proactive management giants are entering the market, using ETFs as a convenient management tool they provide to investors.
There are other reasons for the accelerated development of ETFs in recent years.
Data shows that with the rise of the "AI" wave, investors are racing to invest funds in ETFs with higher AI content. An artificial intelligence and technology ETF under Global X, a globally renowned theme ETF supplier, has more than doubled in size in the past three months.