Global ETF assets ballooned by $390bn in the third quarter of 2024, putting total assets at $12.4trn, both reaching record highs, according to Morningstar.
Inflows to global ETFs for the year now sit on the verge of breaking $1trn, with $947bn brought in this year. Most flows have gone towards equity, representing 60%, followed by fixed income at 33%. Following the lowering of interest rates, excitement grew for bond ETFs, which added $127bn this quarter. This is a new peak for the sector, which had a previously recorded high of £$112bn in flows following the Covid market crash.
Syl Flood, senior product manager at Morningstar Direct, stated: “The category has enjoyed inflows in 115 of the past 120 months, including a current streak of 32 months. Year-to-date flows stand at $279bn, or a 13.5% organic growth rate. However, fixed-income funds’ share of overall ETF assets held steady at 18% as the appreciation of equity assets continued in 2024, thanks to the 18.3% year-to-date return of the Morningstar Global Markets Index.”
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While US-domiciled ETFs have attracted the majority of flows for the quarter, a trend that has continued since 2019, flows towards non-US ETFs have kept up on a percentage basis. While US ETFs grew 8.4% this year, non-US ETFs have jumped 9%. For the third quarter, non-US ETFs raised just over $100bn, while US ETFs attracted just under $300bn.
While ETFs were traditionally associated with passive vehicles, active ETFs have also fought their way towards a larger market share this year. In 2024, actively-managed ETFs have grown 33%, while passive has increased just 7%. The growth spurt has pushed active ETFs to $973bn in assets as of 30 September, up from $683bn at the end of 2023.
Combining the market excitement for bonds and active management in ETFs, fixed income ETFs shot up 12.8% in the three months to the end of September. For the year, growth in the area sits at 37%.
