[Editor’s Note: “As of November 12, the year-to-date net inflows for U.S.-listed ETFs was $915 billion, setting a new annual record. Strong demand for equity ETFs pushed the industry past the milestone.”]
The U.S. ETF industry is about to hit a tremendous milestone. Year to date through November 11, $897 billion has flowed into exchange traded funds, according to FactSet data. With more than six weeks to go in 2024, the 2021 record of $911 billion is about to be shattered. Crossing the $1 trillion net inflows mark in 2024 seems quite achievable.
There has already been $84 billion of net inflows since the start of November. Looking slightly further back, an impressive $205 billion of new money has been invested via ETFs thus far in the fourth quarter of 2024. There is a lot to celebrate in the $10 trillion exchange traded fund industry.
Equity ETFs Still Dominate
Since October, the three largest S&P 500 Index ETFs have unsurprisingly led the charge. With the broad U.S. stock market climbing to new highs, the Vanguard S&P 500 ETF (VOO), the iShares Core S&P 500 ETF (IVV), and the SPDR S&P 500 ETF (SPY) have been in high demand. VOO and IVV have already broken the calendar year record for individual exchange traded fund net inflows, with $90 billion and $57 billion, respectively.
In November, following the reelection of Trump, the iShares Russell 2000 ETF (IWM) erased prior net outflows. Investors believe that smaller companies found in IWM will benefit from potentially lower corporate taxes. Meanwhile, the SPDR S&P Regional Banking ETF (KRE) has been in vogue on expectation of less stringent regulations for banks.
For the year, equity ETFs pulled in more than $587 billion, or 65% of the industry’s cash haul.
Already a Record for Fixed Income ETFs
As a category, fixed income ETFs already have $270 billion of net inflows in 2024. This is more than the approximately $210 billion added in 2020 and 2021. Core bond exposure has been most popular this year. The iShares Core Aggregate Bond ETF (AGG) and the Vanguard Total Bond Index ETF (BND) have added $19 billion and $15 billion, respectively. Meanwhile, the iShares Core Total USD Bond Market ETF (IUSB), which has slight high yield exposure mixed with core investment-grade bonds, and the Vanguard Total International Bond ETF (BNDX) were also highly popular.
In addition, investors have turned to ETFs to take on or take off interest rate risk. The iShares 20+ Year Treasury Bond ETF (TLT) and the iShares 0-3 Month Treasury Bond ETF (SGOV) each pulled in more than $9.5 billion.
Cryptocurrency & Single-Stock ETFs Expand Investor Base
While most exchange traded fund investors start with core equity or fixed income diversified ETFs like VOO or AGG, the ETF industry has evolved. In 2021, the iShares Bitcoin Trust ETF (IBIT) and the GraniteShares 2X Long NVIDIA Daily ETF (NVDL) were not available. This year, these and peer crypto and single-stock ETFs have gained traction from risk-taking investors, some new to the exchange traded fund market.
Numerous Individual ETF Milestones Achieved
A few weeks ago, we highlighted a few ETFs that crossed the $1 billion threshold. Since then, we spotted a few more. The American Century US Quality Growth ETF (QGRO) and the Eaton Vance Floating-Rate ETF (EVLN) recently crossed the $1 billion asset mark. Meanwhile, the NEOS S&P 500 High Income ETF (SPYI) has passed $2 billion.
It remains exciting to see further adoption of broad market ETFs from the top three providers. However, I love when newer entrants demonstrate success. When, not if, we break the calendar-year exchange traded fund flows record, I’ll be celebrating the demand for all ETFs.
VettaFi LLC (“VettaFi”) is the index provider for QGRO, for which it receives an index licensing fee. However, QGRO is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of QGRO.
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