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The global ETF market has been witnessing an unprecedented surge, with the AUM reaching a milestone of $12.3 trillion at the end of February. It saw the 57th month of consecutive net inflows, bringing in $253.04 billion in total assets in the first two months. With this, the global ETF industry had a diverse portfolio of 12,063 products, comprising 24,216 listings from 735 providers on 80 exchanges in 63 countries at the end of February.
According to ETFGI's latest data report, equity ETFs attracted $141.5 billion in assets in the first two months of 2024, followed by inflows of $44.4 billion in fixed-income assets and $7.4 billion in commodities. Notably, active ETFs continued to draw investor interest, achieving net inflows of $46.12 billion in the first two months, significantly exceeding the $24.93 billion in net inflows seen in 2023. Meanwhile, U.S. assets in ETFs hit $8.5 trillion last month, surpassing the previous record of $8.19 trillion set in January.
iShares Core S&P 500 ETF (IVV - Free Report) , Vanguard S&P 500 ETF (VOO - Free Report) , BlackRock's iShares Bitcoin Trust (IBIT - Free Report) , Invesco QQQ Trust (QQQ - Free Report) and Vanguard Information Technology ETF (VGT - Free Report) have been the top asset gatherers until the end of February.
We have highlighted several reasons that led to the popularity and growth of the ETF industry.
Stock Market Rally
The global stock market has been on a superb rally over the past year. The S&P 500 index gained 7.11% in the first two months of 2024. Strong corporate earnings, AI developments and renewed confidence in the tech sector have been the major drivers.
Launch of Spot Bitcoin ETFs
A notable factor contributing to inflows was the introduction of the latest products, especially spot bitcoin ETFs, following the SEC's approval of 10 new products based on bitcoin's spot price in mid-January. This development attracted a substantial number of crypto investors, significantly benefiting funds from major firms like BlackRock Inc. and Fidelity Investments (read: Spot Bitcoin ETFs Smash Records With $1B Inflows).
Institutional Buying
Institutional investors, including pension funds and insurance companies, have increasingly turned to ETFs for both strategic and tactical asset allocation, leading to solid growth.
Key ETF Characteristics
ETFs have unique strategies, creativity, transparency, diversification benefits, enhanced tax competencies, low turnover and, of course, low costs that help to attract more capital for the ETF industry.
Innovation and Variety
The ETF market has seen a surge in innovation, with providers now offering products covering a broad range of asset classes, investment strategies and themes. These include smart beta ETFs, which use alternative index construction rules instead of traditional market cap weighting, and thematic ETFs that focus on emerging trends like technology, healthcare or ESG (Environmental, Social, and Governance) factors.
Below, we have highlighted the top five asset gatherers so far this year:
iShares Core S&P 500 ETF topped asset flow creation, pulling in $16 billion in capital. It tracks the S&P 500 Index and holds 503 stocks in its basket, each accounting for no more than 7.2% of the assets. iShares Core S&P 500 ETF is heavy on the information technology sector, whereas financials, healthcare and consumer discretionary round off its next three spots, with a double-digit allocation each.
iShares Core S&P 500 ETF charges investors 3 bps in annual fees and trades in an average daily volume of 5 million shares. It has an AUM of $446.5 billion and a Zacks ETF Rank #1 (Strong Buy), with a Medium risk outlook (read: Ride the S&P 500 Wave With These ETFs).
Vanguard S&P 500 ETF has amassed $16 billion in capital. It tracks the S&P 500 Index and holds 505 stocks in its basket, each accounting for no more than 7.2% of the assets. Vanguard S&P 500 ETF is heavy on the information technology sector, whereas consumer discretionary, healthcare and industrials round off the next three spots, with a double-digit allocation each.
Vanguard S&P 500 ETF charges investors 3 bps in annual fees. It has an AUM of $428.9 billion and trades in an average daily volume of 4.7 million shares. VOO has a Zacks ETF Rank #1, with a Medium risk outlook.
BlackRock iShares Bitcoin Trust raked in $7.1 billion in capital in the first two months of 2024. It seeks to reflect the performance of the price of Bitcoin. It enables investors to access Bitcoin within a traditional brokerage account. The fund charges 25 bps in annual fees from investors. However, the fee is set to be 0.12% for the first 12 months or on the first $5 billion in assets.
Invesco QQQ Trust saw an inflow of $7.1 billion. It provides exposure to the 101 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Invesco QQQ is moderately concentrated on the top two firms, with 8% share each.
Invesco QQQ is one of the largest and most popular ETFs in the large-cap space, with an AUM of $251.7 billion and an average daily volume of 42 million shares. QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2, with a Medium risk outlook.
Vanguard Information Technology ETF has gathered $6.3 billion in its asset base. It provides exposure to 315 technology stocks. It currently tracks the MSCI US Investable Market Information Technology 25/50 Index. Semiconductors, systems software, technology hardware storage & peripheral, and application software are the top four sectors.
With an AUM of $64.6 billion, Vanguard Information Technology ETF has an expense ratio of 0.10% and trades in an average daily volume of 483,000 shares. It has a Zacks ETF Rank #1, with a Medium risk outlook.
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Global ETFs Soar to Record $12.3 Trillion
The global ETF market has been witnessing an unprecedented surge, with the AUM reaching a milestone of $12.3 trillion at the end of February. It saw the 57th month of consecutive net inflows, bringing in $253.04 billion in total assets in the first two months. With this, the global ETF industry had a diverse portfolio of 12,063 products, comprising 24,216 listings from 735 providers on 80 exchanges in 63 countries at the end of February.
According to ETFGI's latest data report, equity ETFs attracted $141.5 billion in assets in the first two months of 2024, followed by inflows of $44.4 billion in fixed-income assets and $7.4 billion in commodities. Notably, active ETFs continued to draw investor interest, achieving net inflows of $46.12 billion in the first two months, significantly exceeding the $24.93 billion in net inflows seen in 2023. Meanwhile, U.S. assets in ETFs hit $8.5 trillion last month, surpassing the previous record of $8.19 trillion set in January.
iShares Core S&P 500 ETF (IVV - Free Report) , Vanguard S&P 500 ETF (VOO - Free Report) , BlackRock's iShares Bitcoin Trust (IBIT - Free Report) , Invesco QQQ Trust (QQQ - Free Report) and Vanguard Information Technology ETF (VGT - Free Report) have been the top asset gatherers until the end of February.
We have highlighted several reasons that led to the popularity and growth of the ETF industry.
Stock Market Rally
The global stock market has been on a superb rally over the past year. The S&P 500 index gained 7.11% in the first two months of 2024. Strong corporate earnings, AI developments and renewed confidence in the tech sector have been the major drivers.
Launch of Spot Bitcoin ETFs
A notable factor contributing to inflows was the introduction of the latest products, especially spot bitcoin ETFs, following the SEC's approval of 10 new products based on bitcoin's spot price in mid-January. This development attracted a substantial number of crypto investors, significantly benefiting funds from major firms like BlackRock Inc. and Fidelity Investments (read: Spot Bitcoin ETFs Smash Records With $1B Inflows).
Institutional Buying
Institutional investors, including pension funds and insurance companies, have increasingly turned to ETFs for both strategic and tactical asset allocation, leading to solid growth.
Key ETF Characteristics
ETFs have unique strategies, creativity, transparency, diversification benefits, enhanced tax competencies, low turnover and, of course, low costs that help to attract more capital for the ETF industry.
Innovation and Variety
The ETF market has seen a surge in innovation, with providers now offering products covering a broad range of asset classes, investment strategies and themes. These include smart beta ETFs, which use alternative index construction rules instead of traditional market cap weighting, and thematic ETFs that focus on emerging trends like technology, healthcare or ESG (Environmental, Social, and Governance) factors.
Below, we have highlighted the top five asset gatherers so far this year:
iShares Core S&P 500 ETF (IVV - Free Report)
iShares Core S&P 500 ETF topped asset flow creation, pulling in $16 billion in capital. It tracks the S&P 500 Index and holds 503 stocks in its basket, each accounting for no more than 7.2% of the assets. iShares Core S&P 500 ETF is heavy on the information technology sector, whereas financials, healthcare and consumer discretionary round off its next three spots, with a double-digit allocation each.
iShares Core S&P 500 ETF charges investors 3 bps in annual fees and trades in an average daily volume of 5 million shares. It has an AUM of $446.5 billion and a Zacks ETF Rank #1 (Strong Buy), with a Medium risk outlook (read: Ride the S&P 500 Wave With These ETFs).
Vanguard S&P 500 ETF (VOO - Free Report)
Vanguard S&P 500 ETF has amassed $16 billion in capital. It tracks the S&P 500 Index and holds 505 stocks in its basket, each accounting for no more than 7.2% of the assets. Vanguard S&P 500 ETF is heavy on the information technology sector, whereas consumer discretionary, healthcare and industrials round off the next three spots, with a double-digit allocation each.
Vanguard S&P 500 ETF charges investors 3 bps in annual fees. It has an AUM of $428.9 billion and trades in an average daily volume of 4.7 million shares. VOO has a Zacks ETF Rank #1, with a Medium risk outlook.
BlackRock iShares Bitcoin Trust (IBIT - Free Report)
BlackRock iShares Bitcoin Trust raked in $7.1 billion in capital in the first two months of 2024. It seeks to reflect the performance of the price of Bitcoin. It enables investors to access Bitcoin within a traditional brokerage account. The fund charges 25 bps in annual fees from investors. However, the fee is set to be 0.12% for the first 12 months or on the first $5 billion in assets.
BlackRock iShares Bitcoin Trust has an AUM of $16 billion and trades in a volume of 31 million shares (read: Spot Bitcoin ETF Tops $10 Billion in AUM).
Invesco QQQ Trust (QQQ - Free Report)
Invesco QQQ Trust saw an inflow of $7.1 billion. It provides exposure to the 101 largest domestic and international non-financial companies listed on the Nasdaq by tracking the Nasdaq 100 Index. Invesco QQQ is moderately concentrated on the top two firms, with 8% share each.
Invesco QQQ is one of the largest and most popular ETFs in the large-cap space, with an AUM of $251.7 billion and an average daily volume of 42 million shares. QQQ charges investors 20 bps in annual fees and has a Zacks ETF Rank #2, with a Medium risk outlook.
Vanguard Information Technology ETF (VGT - Free Report)
Vanguard Information Technology ETF has gathered $6.3 billion in its asset base. It provides exposure to 315 technology stocks. It currently tracks the MSCI US Investable Market Information Technology 25/50 Index. Semiconductors, systems software, technology hardware storage & peripheral, and application software are the top four sectors.
With an AUM of $64.6 billion, Vanguard Information Technology ETF has an expense ratio of 0.10% and trades in an average daily volume of 483,000 shares. It has a Zacks ETF Rank #1, with a Medium risk outlook.