Active ETFs growth, ~$1T in assets

Tue, 09/03/2024

by Ellie LeTu

Source: Financial Times

• Rapid growth of active ETFs

  • Reached $947B in assets in July 2024, will soon hit $1T (1/13 of mutual funds’ assets).

  • Growth rate of 48% since 2019.

• More attractive than mutual funds

  • ETFs offer better tax advantages for U.S. investors.

  • ETFs provide more flexibility with multiple transactions allowed per trading day.

  • While mutual funds faced net outflows, active ETFs saw $665B in net inflows in the first half of 2024.

• Global movement of ETFs expansion

  • Active ETFs are now allowed in France, South Africa, Japan, and Singapore.

  • U.S. fund groups are seeking to replicate Vanguard's ETF structure following the expiration of its patent.

• Concerns

  • SEC approval of fund groups' appeals is still pending.

  • Questions remain: Are active ETFs a good investment compared to mutual funds and cheaper passive ETFs?