The exchange traded fund universe has been rapidly expanding over the years, but for the first time ever, we saw the number of total offerings shrink.
While 77 new ETFs have come to market so far this year, 123 U.S.-listed ETFs have been delisted, Barron’s reports.
Nevertheless, demand for ETFs has not abated. The U.S. ETF industry still attracted net inflows of $108 billion so far this year.
Looking at ETF flows, investors have gravitated toward the largest and most liquid offerings during the more volatile market conditions. DataTrek data reveals that just 18 funds represented 100% of the aggregate inflows so far this year.
The ETF flows data also show that 47% are going into U.S. large-cap equities, 25% into high-quality fixed-income, 18% into commodities – mostly gold, and 10% into other categories.
The most popular stock ETF plays this year are also among the most well know, including the Invesco QQQ Trust (NASDAQ: QQQ), iShares Core S&P 500 ETF (IVV), Vanguard S&P 500 ETF (VOO), and Vanguard Total Stock Market ETF (VTI), among others.
The top fixed-income ETF plays that attracted the most assets include the SPDR Barclays 1-3 Month T-Bill (NYSEArca: BIL), iShares Short Treasury Bond ETF (NasdaqGM: SHV) and iShares iBoxx Investment Grade ETF (LQD).
The iShares MSCI USA ESG Optimized ETF (NasdaqGM: ESGU) also stood out, bringing in half of the $10.6 billion that went into the other category.
This is “defensive posturing,” DataTrek co-founders Nicholas Colas and Jessica Rabe said. “The stress to the financial system this year has effectively increased asset concentrations in the ETF ecosystem. In this respect, the Covid crisis is different from the Financial Crisis and its aftermath, when the number of ETFs grew by 10% a year from 2008 to 2011.”
According to Morningstar Direct data, ETFs assets were $3.7 trillion in March, or about where they were in January 2019.
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