ETF Inflows Inched Up to $31.7B in April as Mutual Funds Lagged

The year is shaping up much like 2022, industry expert says.

Total net inflows to exchange-traded funds crept up by a half-percentage point to $31.7 billion in April, according to market researcher Cerulli Associates, in what may be a continuation of ETFs grabbing market share from mutual funds.

The inflow was a reversal of the $12 billion that moved out of ETFs in April 2022, and represented a 0.5% “organic” growth rate, Cerulli reported. That brought total exchange-traded fund assets to “right under” $7 trillion, a 1% growth rate, the firm said in its monthly Cerulli Edge commentary.

Mutual funds experienced $25.2 billion in April outflows, boosting total outflows for the year to $86.1 billion through April 30. Despite the outflows, mutual fund assets this year, through April 30, had gained 5.7% to $17.2 trillion, a period in which the S&P 500 rose 3.1%.

Asset managers are moving away from selling mutual funds and favoring ETFs, a poll last month from Cerulli found. The survey also reported that ETFs offer a solid investment opportunity for 79% of asset managers, 54% of whom use them. A quarter reported that even though they don’t invest in them now, they will start within the next 12 months, while 33% said they had no plans to do so.

This year’s ETF activity is shaping up to be a replay of 2022 in terms of growth, according to one industry expert. Last year, the ETF inflows stood at $600 billion by year’s end, whereas 2021 had been a banner year with $900 billion in inflows.

Jillian DelSignore, managing director of asset management platform FLX Networks, said her hopes for a $1 trillion year in ETF inflows have been dashed.

“It’s not likely with the start we’ve had this year. I think this year will fall more in line with 2022,” she said in an interview. She said she expects ETF assets reached around $150 billion as of the end of May.

DelSignore predicted the active ETF flows in the U.S. will surpass $90 billion, topping last year’s $85.5 billion. Active funds’ assets under management topped $340 billion at the end of last year.   

“Active ETFs are a focus for me and for the industry,” she added. “While a fraction of AUM and flows, I do think they will continue to punch above their weight class and see significant growth and flows.”

Follow Michelle Lodge on Twitter @lodgemich