Global Active ETF Assets Hit New Record at $1.4T: ETFGI

Investors around the world are funneling their money into actively managed exchange-traded funds, new data show. Assets invested in the actively managed ETFs listed globally hit a new record of $1.4 trillion at the end of May, according to London-based independent research and consultancy firm ETFGI.

The previous record was $1.3 trillion set just the month before. 

Growth of Active ETFs 

Year-to-date net flows of active ETFs have also reached a record high of $220.3 billion, surpassing the previous high of $124.6 billion last year. There are 3,671 actively managed ETFs listed globally, with 4,757 listings, assets of $1.4 trillion from 563 providers listed on 42 exchanges in 33 countries at the end of May, according to ETFGI.

Users of ETFs—financial advisors and retail investors—prefer to do their investing through the ETF wrapper, and they’re asking asset managers to offer their mutual funds in ETFs, Deborah Fuhr, managing partner, founder and owner of ETFGI, explained to etf.com. As a result, we’re seeing more mutual-fund-to-ETF conversions, as well as new actively managed products.

“The ETF has really become the preferred vehicle for investors,” Fuhr said. 

The Appeal of Active ETFs

In the U.S., investors are drawn to the tax efficiency of ETFs. These funds also tend to be lower cost than their mutual fund counterparts, and they give investors the ability to buy or sell in real time during the trading day as opposed to having to wait until the market closes.

But investors want to do better than the average, and indexing won’t do the trick.

“Many are hoping that the story behind active managers and portfolio managers picking stocks is something that will deliver for them,” Fuhr said. People perceive that these strategies are an enhanced form of index strategies and a systematic way to deliver better returns than a “plain vanilla index”, she added.