Exchange traded funds are a rising star in the financial industry and have now accumulated over $3 trillion in assets under management.
Over July, U.S.-listed ETFs saw $23.4 billion in new investor money flowing in, which pushed assets under management in ETFs over the $3 trillion market, Bob Pisani reports for CNBC.
According to XTF data, there were 2,041 U.S.-listed ETFs with $3.065 trillion in assets under management as of the end of July.
ETFs have been a popular play this year as investors plunged into the market as the bullish conditions extend toward the ninth year. Last year ETFs had a record inflow of $287 billion for the entire 2016, and the ETF industry has already brought in $272 billion in inflows in just the first seven months.
Related: ETF Performance Report – July 2017
Overall, most of the money has flowed into bond ETFs, notably corporate debt, as fixed-income investors sought attractive yield-generating assets in a stubbornly low yielding environment. More investors are also seeking riskier bets to fuel trades in stretched market conditions.
“Investors are bored,” Dave Nadig, head of ETF.com, told CNBC. “The S&P is up over 9 percent this year, but the VIX is at 9, so investors are chasing emerging markets, and the junkier end of the bond spectrum.”
With valuations looking pricey in U.S. equities, many ETF investors have also shifted their attention toward relatively cheaper markets, like emerging markets and Europe. The shift in flows may reflect investors changing sentiment on Europe and EM markets after investors yanked billions out of related equity ETPs globally last year. Consequently, cash that may have been sitting on the side is finally being put to work.
For more information on the ETF industry, visit our ETF performance reports category.