This Year’s ETF Launches Trail 2021

This year is poised to trail 2021 in terms of the number of launches, driven by market turmoil and market saturation.  

As November closed, 395 ETFs had launched year to date. That’s an impressive number for sure, but it’s still 27 fewer than had launched by this time last year, which was a record-breaker in terms of the number of ETFs that debuted.  

Given that the number of ETFs currently trading surpassed 3,000 products in October, which some might view as a saturation point for the time being, in addition to the concerns around recession in the U.S. and globally, the slowdown in launches isn’t surprising.  

So far in 2022, September was the month with the largest number of launches, with 52 ETFs rolling out. Last year, September also had the highest number of launches, at 67 new ETFs.  

2021 and 2020 both saw record-breaking launch numbers even as uncertainty around the economic and market environments has increased, so it seems reasonable that ETF rollouts would slow a bit. The industry couldn’t keep up that pace forever. 

However, the proportion of actively managed ETFs to passively managed ETFs seems to be maintaining at roughly a 60/40 split, with 61% of this year’s launches relying on active strategies. Last year, for the same time period, that percentage was 64%.  

Through November, equity-focused funds represent 57% of total ETF launches, while fixed income ETF launches represented 20% of the total. The remaining 23% are a mix that includes leveraged, inverse and commodity ETFs, among other asset classes.  

The largest ETF launch, year to date, is an ETF that converted from a mutual fund in May. The Dimensional US Marketwide Value ETF (DFUV) has $8.2 billion in assets under management, a little more than it had in assets at the time of its conversion. There have been roughly a dozen such conversions of mutual funds into ETFs so far in 2022.  

Closures, meanwhile, have picked up significantly. Last year, the total number of closures stood at 79, the lowest number of closures in roughly a decade.  

2002 has already seen 123 completed closures and another nine set to shutter by the end of the year. December is often a very active month for ETF closures, so that number—like the number of launches—is likely to continue to rise before the end of 2022. 

Contact Heather Bell at [email protected]