ETF Inflows & Outflows
Performance Leaders & Laggards
Source: ETF Action; flows and performance data as of 7/18/24; performance data excludes leveraged and inverse products
Weekly ETF Reads
Fund managers forgo billions in fees in race to the bottom by Emma Boyde
“Active managers are being pulled into ETFs and are having success in the ETF space, but part of the money is flowing from their mutual funds.”
Bond Kings Draw Record $44 Billion to Actively Managed ETFs by Michael Mackenzie and Silla Brush
“At the mid-way stage of the year, 91% of funds benchmarked to the Bloomberg Agg that manage more than $1 billion are beating the index.”
Finding the Right Small-Cap ETF for Different Outcomes by Cinthia Murphy
“The move we just witnessed was the biggest small-cap outperformance relative to large-caps in a five-day period ever.”
Raymond James Targets 2025 ETF Debut by Jeff Benjamin
“It just seems like a logical move, but what took them so long?”
Where will ETFs’ next $10tn come from? by Eva Thomas
“The transfer of generational wealth is a huge area of potential growth that could contribute to the next $10tn. The Baby Boomer generation grew up in a mutual fund world.”
The increasing complexity of the ETF universe by Robin Wigglesworth
“There’s plenty of good stuff to chew on in the 20th edition of the annual snapshot of the ETF industry.”
The 2024 Intern’s Guide to ETFs by Phil Mackintosh
“ETFs are one of the most successful financial innovations of the last 30 years.”
What’s Next for Ethereum ETFs Following SEC Approval? by Foley & Lardner LLP
“The most important development from the approval order was the SEC heavily implying that ETH is a commodity and not a security.”
ETF Tweet of the Week
I had a strong feeling the SEC would approve spot ether ETFs last week and, sure enough, that’s exactly what happened. Bloomberg’s Eric Balchunas scooped the story on Monday. By the end of the week, Cboe was indicating spot ether ETFs that would list on their exchange were now ready for launch:
“We are pleased to announce that (spot ether ETFs) will be listed on Cboe and will begin trading as a new issue on July 23, 2024, pending regulatory effectiveness.”
Let the race – which Balchunas calls the “Ethness Stakes” – begin.
Update: Nate's instincts were right, hearing SEC finally gotten back to issuers today, asking them to return FINAL S-1s on Wed (incl fees) and then request effectiveness on Monday after close for a TUESDAY 7/23 LAUNCH. This is provided no unforeseeable last min issues of course! https://t.co/D21FD9Qf94
— Eric Balchunas (@EricBalchunas) July 15, 2024
ETF Chart of the Week
The below chart, courtesy of Bloomberg’s Katie Greifeld, is always one of my favorites due to its simple elegance. While the media (and yours truly) spends too much time focusing on specific categories such as spot bitcoin and ether ETFs, it’s easy to take for granted the money flowing into ETFs overall – at the expense of mutual funds. Investors flocking to plain-vanilla, index-based ETFs remains the biggest driver, but the rise of active ETFs is now providing a meaningful boost as well.
In a new paper titled “Decoding Active ETFs: How the growth of active ETFs is unlocking innovation and opportunity for investors”, BlackRock said the following:
“Across the industry, and within our own firm, the growth of new offerings in active ETFs is accelerating. In 2021, about a quarter of global ETF launches were actively managed; through the first half of 2024, 41% of all ETFs launched were active. Given these trends, we expect global active ETF assets under management to reach $4 trillion by 2030 — more than a four-fold increase in about six years.”
BlackRock went on to say they believe the asset management industry is at an inflection point and active ETFs are one of the industry’s next big growth drivers.
Expect this chart to look even better for ETFs – and worse for mutual funds – moving forward.
Source: Bloomberg’s Katie Greifeld
