As investors continue to pour into cheap passive index-based investments, the global exchange traded fund industry has broken above $4 trillion in assets under management.
According to ETFGI data, there are almost 7,000 exchange traded products, or ETFs and exchange traded notes, managed by 313 providers and total assets of $4.002 trillion as of the end of April, reports Robin Wigglesworth for the Financial Times.
As part of an ongoing theme, more investors have grown disillusioned with the high fees and underperformance of actively managed strategies, opting to shift assets out of the traditional open-end active mutual fund universe and into cheap, index-based ETFs. As of the end of March, there were $2.8 trillion in U.S.-listed ETFs and $16.9 trillion in U.S.-listed mutual funds, whereas the numbers were $2.1 trillion and $15.7 trillion, respectively, last year.
“The active asset management headwinds aren’t abating,” Ben Johnson, head of ETF research at Morningstar, told the Financial Times. “It’s not about performance any more. It’s structural.”
ETFs accumulated a record $37.94 billion in net inflows over April, the 39th consecutive month of net inflows, bringing this year’s total to $235.2 billion, compared to 2016’s inflows of $81 billion for the same period.