In the US, this growth was driven by an exodus from traditional active mutual funds. Actively managed funds in the US have seen a steady decline, experiencing net outflows for 12 of the last 13 years. According to the Investment Company Institute, those withdrawals have totaled $ 2.8 trillion since 2008.
“The shift in investors from actively managed funds to ETFs, which began in the US, has spread to every corner of the financial markets since the end of the global financial crisis in 2007-08,” said ETFGI founder Deborah Fuhr. “Active managers know that competition from ETFs is increasing everywhere and they have to react.”
According to Morningstar, 199 ETFs debuted in the U.S. in the first half of this year, compared to just 109 mutual funds launched during the same period. After standing for years, large active fund managers – including two American wealth management giants – are finally giving in to investors’ preference for the lower-cost ETF format.
In an announcement last month, Capital Group said it intends to launch six active ETFs by the end of March; At the time, Capital CEO Tim Armor saw “no reason” why the company, with $ 2.6 trillion in assets under management, couldn’t build a $ 500 billion ETF business. Federated Hermes, a manager with assets of $ 646 billion, also plans to launch two active bond ETFs.
According to the figures from ETFGI, inflows into active ETFs from around the world reached $ 95.2 billion this year by the end of August, surpassing the total annual amount of $ 91.1 billion.