$60 Billion In Inflows For ETF Industry In 2024; 42% To Active And Semi-Active ETFs

HFA Padded
HFA Staff
Published on

In April 2024, the global ETF sector witnessed substantial inflows, amassing a total of $59.4 billion. The U.S.-domiciled ETFs led the charge, attracting $31.7 billion, followed by those based in Ireland with $10.4 billion, and Taiwan with $5.1 billion.

Equity ETFs dominated the inflows, garnering $33.0 billion, while bond ETFs secured $25.3 billion, and commodities ETFs drew $1.2 billion. Within these categories, the top-performing classifications included Equity U.S., which saw an influx of $10.5 billion, Equity Global ex U.S. with $5.8 billion, and Equity Japan with $5.4 billion.

Conversely, ESG-related ETFs experienced a downturn, facing outflows totaling $3.1 billion throughout the month. Among ETF promoters, Vanguard emerged as the frontrunner, with net sales of $21.2 billion, trailed by BlackRock (iShares) with $7.9 billion, and Nomura Asset Management with $5.1 billion.

Additionally, Active and Semi-Active ETFs reported significant gains, accumulating $24.4 billion in inflows for April.

General Overview

In April 2024, the global ETF industry experienced robust inflows despite a volatile market environment, influenced significantly by escalating geopolitical tensions in the Middle East. The developments around the Red Sea have had notable repercussions, with several shipping companies now bypassing the Suez Canal. This rerouting is expected to exacerbate delivery times, further straining already fragile supply chains in Western economies.

Market sentiment was also shaped by optimism regarding central banks, particularly the U.S. Federal Reserve, nearing the final stages of their battle against persistently high inflation. The Federal Reserve’s dovish comments during their meetings suggested a potential easing of interest rates, although they hinted that any rate reductions would commence later and proceed more gradually than some investors anticipated. This cautious stance likely influenced net flows into bond and money market ETFs, as investors recalibrated their expectations in light of potentially stubborn inflation in major economies and the ongoing responsibility of central banks to achieve their inflation targets.

Additionally, concerns about a potential recession in the U.S. and other major global economies persisted. These worries were fueled by stagnant growth in certain regions and the presence of long-term inverted yield curves, traditionally seen as early indicators of economic downturns. The normalization of these yield curves presents a short-term challenge for the bond markets.

Amidst this backdrop, ETF promoters saw significant inflows, amounting to $62.1 billion, while promoters of structured notes faced outflows totaling $2.7 billion throughout April 2024.

Via  LSEG Lipper’s Global ETF Industry Review for April 2024

HFA Padded

The post above is drafted by the collaboration of the Hedge Fund Alpha Team.