Morningstar’s global ETF flows report for the first half of 2024 shows that actively managed ETFs have captured 25 per cent of flows so far in 2024 despite representing just 7 per cent of ETF assets.
The firm also reports that iShares had record monthly global flows in June, tallying USD57 billion worldwide. Other key takeaways include:
Actively managed ETFs captured 25 per cent of flows in the year through June and grew organically at 20 per cent, while passive ETFs grew at a 3 per cent organic rate. Actively managed assets grew to a record USD889 billion after starting the year with USD714 billion.
Fund groups outside of the largest 10 providers are using actively managed strategies to win investors’ attention: USD110 billion of their USD157 billion in year-to-date flows were sourced from active ETFs.
BlackRock’s DYNF had the greatest flows of any actively managed ETF, with USD8 billion.
iShares flows hit a dizzying USD57 billion in June, eclipsing its previously monthly record of USD43 billion in November 2023. Eighty per cent of its June flows were sourced from US-domiciled vehicles, 16 per cent from Ireland, and the remainder from nine other domiciles
Vanguard S&P 500 ETF had USD43 billion of inflows, its greatest six-month tally in its history. Assets in VOO stand at USD472 billion.
Actively Managed ETFs: Top Providers by Year-To-Date Flows
Actively managed ETFs have captured 25 per cent of flows so far in 2024 even though they represent just 7 per cent of ETF assets. JPMorgan led all providers with USD23.2 billion of inflows, USD8 billion of which was sourced from just eight of their 179 actively managed ETFs. Only 20 of 430 actively managed ETF providers had outflows in the first half of the year.
The Equity category holds 51 per cent of assets and, given its growth rate relative to Fixed Income, looks to maintain over half of assets, at least until the next equities drawdown or bear market. Without US spot bitcoin flows, the Alternative category would be in net outflows for the year to date.
Overall industry
New products introduced so far in 2024 reflect the relative levels of maturity of each market, Morningstar writes. Most new funds in the US are actively managed, since the race to achieve scale in core passive strategies is all but over. Meanwhile, product innovation in Ireland and Luxembourg, which serve investors in Europe and other markets, is still focused on passive strategies, the firm says.
Syl Flood, Senior Product Manager, Morningstar, says: “The popularity of the active ETF approach in North America is very clear to see. US active managers have seen immense interest in these products so far in 2024 and the direction of travel, at the moment, only appears to be one way. In the meantime, though, passive ETFs continue to collect their normal billions, but active strategies is where the action is.
“iShares had its greatest monthly flows ever. In fact, it has only had two quarters with outflows since 2008, and those outflows were very small. Its strong growth can be attributed, in part, to its prevalence in the model portfolios being utilised by financial advisers in the US — including those iShares constructs and markets itself.”
