Why Exchange-Traded Funds Are Poised For Another Record Year

Flows into exchange-traded funds are on course to surpass the record levels achieved in 2020 as investors continue to pour more funds, FT reported.

Data from ETFGI shows that ETF inflows have already hit $659 billion in the first semester, versus the $767 billion for the full-year 2020. Global equity-based ETFs posted $459 billion in net flows, exceeding 2020’s full-year figure of $366 billion.

Investor activity is growing in fixed income, model portfolios, the increasing popularity of firms taking into consideration environmental, social, and corporate governance standards, and actively managed portfolios.

The global ETF market is already valued at $9 trillion, and asset managers expect it to hit $15 trillion by 2025 as more enter the market with stockpiling and portfolio construction expertise.

Investors are bullish on ETFs, but a bear market could slow down growth momentum.