ETFs Assets Hit Record $10.9T in July

ETFs were a popular choice among investors in July, as global assets flowed into riskier investment vehicles, according to data from research firm ETFGI. 

Exchange-traded funds raked in $87 billion globally last month, as total assets hit a record $10.9 trillion. The monthly net inflows brought total flows year to date up to $464 billion, down from $505 billion over the same period a year ago, according to the report. 

Equity ETFs took in the lion’s share, with $51 billion, about double the $26 billion that bond ETFs garnered in July. The inflows are a major departure from earlier in the year, when bond ETFs topped equity ETFs in year-to-date inflows through the end of May.  

“It’s a risk-on appetite from investors,” said Deborah Fuhr, founder and managing editor of ETFGI. 

Active ETF Assets Draw Outsized Inflows 

Actively managed ETFs continued to have disproportionate inflows, a trend that has continued since the beginning of the year.  

Despite making up only 5% of total ETF assets, active ETFs pulled in about 18% of total flows.  

Fuhr said this is a combination of investors allocating money into ETFs, which were once put in mutual funds, as well as new investors being drawn to active management.  

Significantly lower fees offered by many of these new active ETFs make them more attractive than active products in the past, she added.  

According to the annual SPIVA survey, which measures the performance of active funds against index funds, the majority of active funds have underperformed over the long term when accounting for their fees.  

With lower fees, active ETFs may have a better chance of outperforming the future, she noted. The top ETFs by monthly inflows were the iShares Core S&P 500 ETF (IVV), the iShares 20+ Year Treasury Bond ETF (TLT) and the Vanguard S&P 500 Index Fund ETF (VOO), which brought in $9.9, $4.8 and $4.4 billion in inflows, respectively.  

Contact Gabe Alpert at [email protected]