After Big May, ETFs Headed for 2nd Best Year Ever

After Big May, ETFs Headed for 2nd Best Year Ever

A State Street report shows growing investor enthusiasm for active strategies.

Wealth Management Editor
Reviewed by: Staff
Edited by: Staff

The bullish mood in financial markets led to a big May for domestic equity ETFs, including an especially strong showing for active strategies, and has now put funds on course to reach the second highest level of inflows in their history, according to the author of a State Street Global Advisors report. 

The report, which credits the ongoing rally by the technology and communication services sectors for keeping the risk-on mood alive among investors, showed $92 billion moving into ETFs during May, the best ever for the month and ninth-best overall for any month. 

Of those inflows, $60 billion went into equity ETFs, including $50 billion into U.S. equity strategies. That trend aligns with the strength of broader markets. The S&P 500 has gained 11.2% year-to-date. this year through May.

Projecting from the $320 billion in inflows that has gone into ETFs so far this year to a full-year total, report author Matthew Bartolini, head of SPDR Americas Research at Boston-based SSGA, said that ETFs would generate $770 billion in 2024. But Bartolini added that this total doesn't account for the "usual 31% bump for second-half inflows," which could put the total at $890 billion, the second highest annual finish behind only the $990 billion in 2021. 

Active ETFs Raking in Assets

The SSGA findings showed strong investor appetite for actively managed strategies, with $22 billion moving into active ETFs in May, marking the 50th consecutive month for inflows into active ETFs.

Through May, active ETFs accumulated more than $108 billion, which represents 33% of all ETF inflows despite representing just 7% of all ETF assets.

“The pace is unlike anything we’ve seen, and active ETFs could hit a record $260 billion if the year-to-date average flow trends continue,” Bartolini said.

The $13 billion into active equity ETFs in May represented the third-highest monthly inflows for the category, according to the report. Active bond ETFs received $7 billion during the month, marking the second-highest monthly inflows for the category and a record 13th consecutive month with more than $1 billion of inflows.

Alternative-strategy ETFs received $2.7 billion in May for a five-month total of $18.6 billion.

Jeff Benjamin is the wealth management editor at, responsible for coverage related to the financial planning industry. This includes writing, hosting podcasts, webinars, video interviews and presenting at in-person events.

Jeff is a veteran journalist with more than 30 years’ experience covering the financial markets. He has won more than two dozen national and regional awards for his reporting. He most recently worked as a senior columnist at InvestmentNews where he wrote about investment products and strategies, as well as the broader financial planning industry. Prior to that, Jeff worked as an analyst at Cerulli Associates where he researched and wrote reports on the alternative investments industry. Jeff also worked as a money management reporter at Dow Jones Newswires, where he covered the mutual fund industry.

Based in North Carolina, Jeff is a former Marine and has a bachelor’s degree in journalism from Central Michigan University.