It has truly been a milestone year for the exchange-traded fund business in the U.S. So to close out 2024, P&I presents some of the most significant figures.
$1.1 trillion
ETFs clocked over $1.1 trillion of net inflows in 2024, smashing the previous record of $900 billion set in 2021, according to data from Factset Research Systems as of Dec. 27. Moreover, total assets across nearly 4,000 U.S.-listed products are now approaching $11 trillion.
By comparison, long-term mutual funds (excluding money market funds) tracked by the Investment Company Institute saw nearly $500 billion in net outflows through Dec. 4, while total assets stood at $22.4 trillion through November. Through the end of 2023, according to ICI, there were 8,582 U.S. mutual funds, including money market funds.
$263 billion
Nearly a quarter of all net inflows in 2024 — $263 billion — went to actively managed ETFs, which have now passed $800 billion in assets under management. The effects of the 2019 ETF rule continue to reverberate throughout the asset management industry, placing daily disclosed active and passive products on equal footing and speeding time to market for new entrants. Active equity products added $133 billion to top $500 billion in AUM, while active fixed-income products, led by the $16.6 billion Janus Henderson AAA CLO ETF, added $110 billion to top $288 billion.
“This is the year that active ETFs truly arrived,” said Ben Johnson, head of client solutions, asset management, at Morningstar, noting that 2024 net inflows to active products were nearly double that of 2023. While much of the flows to active ETFs have gone to fixed-income and systematic broad-based equity offerings, Johnson highlighted flows into the $1.5 billion GMO U.S. Quality ETF (QLTY), a late 2023 launch from long-time ETF holdout GMO, as a sign that even concentrated equity portfolios have a place in the ETF market.
$113 billion
The $595 billion Vanguard S&P 500 ETF (VOO) added more than $113 billion of net inflows on its own, challenging the global asset crown of State Street Global Advisors' $637 billion SPDR S&P 500 ETF (SPY), which added just $14 billion through late December. Alongside VOO, the $599 billion iShares Core S&P 500 ETF (IVV) from BlackRock took in nearly $85 billion. A competing, lower-priced product from SSGA, the $55 billion SPDR Portfolio S&P 500 ETF (SPLG), added about $20 billion.
746
Through Dec. 27, 746 new ETFs came to market in the United States in 2024. Paired with 187 closures, the 559 (and counting) net new products this year has far eclipsed the 2021 mark of 396 (474 launches, 78 closures) as well as 2023’s 543 new launches, according to FactSet.
Most new products, however, do not enjoy the novelty of the bitcoin ETFs and often languish at low asset levels.
The variety and pace of ETF launches “can get confusing,” said Elisabeth Kashner, director of global funds research at FactSet. “Product issuers are grappling with the challenge of getting noticed,” she said, “and most will face an uphill battle for assets.”
Kashner also pointed out that the quantity of launches is skewed by specific products offered in a series or suite, such as defined-outcome or “buffered” ETFs that use options for downside protection (and limit upside).
42
Tracked meticulously by Morningstar’s Johnson, 42 asset managers have now filed with the U.S. Securities and Exchange Commission to offer an ETF (or mutual fund) share class of an existing mutual fund (or ETF). This water behind the damn has largely slowed wholesale mutual fund to ETF conversions.
Fifty-five mutual funds became ETFs this year, according to Morningstar Direct, a research service providing investment statistics for institutional investors, but individual fund conversions are not as efficient as winning multishare class approval for an entire series trust. Currently in use only by Vanguard for its passive funds, most asset managers seeking multishare-class relief are looking primarily to employ this treatment for actively managed funds. In November, State Street Global Advisors submitted a request to offer mutual fund shares of its existing low-cost SPDR Portfolio suite of ETFs within retirement plans.
9
On Jan. 11, the ETF landscape changed dramatically when nine asset managers launched spot bitcoin ETFs, and the closed-end Grayscale Bitcoin Trust converted to an ETF.
Since then, the iShares Bitcoin ETF became the fastest product to eclipse $50 billion and bitcoin ETF assets collectively topped $100 billion. Meanwhile, Grayscale’s higher-priced ETF has bled assets, as many expected, and compelled the firm in July to launch a competitively priced offering. The late November launch of options on several bitcoin ETFs will only open the asset class to more creative products and uses, as well as the potential for a more crypto-permissive SEC.
All data provided by FactSet Research Systems as of Dec. 27 unless otherwise noted.
