Active ETF Sales Globally Surge 70%

We’d say they’re selling like hotcakes, but the worldwide flapjack exchange is notoriously opaque.

Flows into active ETFs globally climbed 70% in the first quarter from the same period a year earlier, as investors poured more than $245 billion into the vehicles, per recent data from ETFGI. That’s a record, but it’s not a dramatic outlier, as March represented the 72nd consecutive month for net inflows to exchange-traded funds. 

“It illustrates how ETFs have moved on to become a core part of the investing infrastructure,” said Deborah Fuhr, founder of ETFGI.

Still a US Story, for Now

Across ETFs both active and passive, total global inflows for the quarter were $637 billion, with nearly three quarters, $470 billion, of that in US-domiciled funds, the group found. Investors in Europe and Canada followed, with net inflows of $129 billion and $54 billion, respectively, in funds domiciled there. Still, the Asia-Pacific region has been growing considerably as regulations favor ETFs and more retail investors are seeking them, per a recent report from Citi. As of the end of February, total assets in ETFs were more than $1.8 trillion in the zone, projected to nearly double by 2030, the firm concluded. By comparison, total US assets in ETFs are about $13 trillion. 

Product launches also illuminate the trend:

• Of the 626 net new funds appearing globally in the first quarter, 203 were US ETFs.
• Asia-Pacific (not including Japan) ETFs followed, at 174.
• Meanwhile, there were 138 new ETFs in Europe, 68 in Canada and 28 in Japan, on a net basis.

What People Want: While many of the new products are single-stock, leveraged or thematic funds, most of the ETFs seeing the highest flows are much more diversified and well-established. The State Street SPDR Portfolio S&P 500 ETF (SPYM), for example, brought in more than $27 billion, followed by the Vanguard S&P 500 ETF (VOO), at over $22 billion. However, a new fund, the ProShares Genius Money Market ETF, was not far behind, at nearly $22 billion in net flows. “A lot of people still think it’s a niche thing, especially outside the US,” Fuhr said. “People don’t realize how significant the use of ETFs really has become.”