As the number of exchange-traded funds around the world exploded over the past decade, active strategies saw a boom in North America even as the region remains cool on ESG investments, according to a new report.
The fifth annual global ETF survey report from TrackInsight – prepared in collaboration with J.P. Morgan Asset Management and State Street – drew on insights from more than 500 investment professionals who collectively manage ETF assets north of $900 billion, as well as its database of over 10,000 exchange-traded products.
According to the report, the market boasted nearly 8,990 ETFs as of the end of 2023, with North America claiming a dominant 51.1% share. That came alongside a leap in assets under management to $11 trillion globally, with North American ETF assets jumping from $2.02 trillion in 2014 to $8.43 trillion today.
The report highlighted the recent surge in active ETF strategies, particularly in North America – which accounted for 25% of the 2023 inflows – to push total active assets in the region to a record $630 billion. Adoption of active ETFs has been comparatively sluggish in Europe, according to the report, with only $32 billion in assets accumulated across the pond.
While excitement in thematic investments has cooled off from pandemic-era peaks, specific themes like AI, robotics, and automation continue to attract significant interest, especially in the US and Europe. TrackInsight highlighted Europe's steadfast commitment to climate change and net-zero goals, with over $10 billion being funneled into related ETFs last year.
An intriguing cross-Atlantic polarity also emerged in the ESG sector, with Europe injecting a $50 billion into ESG ETFs to command a 75% share of global ESG ETF assets. In contrast, the U.S. has witnessed a significant decrease in net flows, which was attributed to political pushback.
Global interest in cryptocurrency ETPs also saw a revival, the report said, spurred by anticipation of the SEC's approval of spot bitcoin ETFs. This shift has seen North America and Europe collectively attracting more than $2.5 billion in investment, indicating a potential end to the crypto winter.
And as rate hikes by central banks helped push bond yields up, global fixed-income ETF assets reached the $2 trillion mark. Investors expressed a renewed appetite for fixed income by plowing $287 billion into the space, with North American fixed-income ETFs taking in $220 billion.
"This year's Global ETF Survey underscores the vibrant expansion and the transformative potential of the ETF industry,” Philippe Malaise, CEO of TrackInsight, said in a statement. “The findings highlight the adaptability of ETFs to market changes and investor needs, reinforcing their essential role in contemporary investment strategies."
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