While global markets experienced greater oscillations over 2018, investors continued to pile more money into exchange traded funds as their investment of choice.
U.S.-listed ETFs still attracted $314 billion in net inflows over 2018, marking the first time the ETF industry accumulated more than $300 billion in inflows for two consecutive years, Matthew Bartolini, Head of SPDR Americas Research at State Street Global Advisors, said in a research note.
However, the U.S. ETF industry still shrunk over 2018 after the price volatility sent 71% of all global stocks into a bear market and caused the S&P 500 to experience its worst December performance since 1931, ending a streak of nine consecutive years of positive annual total returns.
“For the ETF industry, 2018 could be considered the year that went nowhere, as assets fell by $26 billion. The market’s impact completely offset the $314 billion of inflows during the year,” Bartolini said.
ETF investors still favored stock strategies as they funneled close to $213 billion into equity ETFs, followed by close to $97 billion in fixed income-related ETFs.