2017 was a banner year for Exchange Traded Funds (ETFs).
According to data from Charles Schwab, Bloomberg, and Investment Company Institute, ETFs saw a record inflow of more than $800 billion in 2017. That inflow came at the expense of mutual funds, who saw an outflow of about $200 billion.
(Image Courtesy of Business Insider)
What’s even more impressive about ETFs earning a record $800+ billion inflow in 2017 is that the record before this was in 2016 …. At $286.5 billion.
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Since 2008, the global asset management industry has been reeling under a relentless tsunami. While the assets under management (AUM) of actively managed mutual funds (MFs) have increased from $9.0 trillion to $13.4 trillion, passively managed index funds have surged from $0.6 trillion to $2.2 trillion. These now account for 12% of the total MF industry. Vanguard, the international company most identified with passive investing, had less than $25 billion in AUM for over two decades since its inception in 1975. It crossed the $100-billion mark in 1995. The march of exchange-traded funds (ETFs) has been equally impressive. By various accounts, the total AUM of ETFs has crossed the $2.1-trillion mark. ETFs have made significant inroads into the fixed income asset class, while index funds have been focused on equity.
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