Actively managed exchange-traded funds are growing much more quickly than traditional ETFs. They grew at a 14% organic rate in the first half of the year, while passive ETFs grew only 3%, according to Morningstar’s Global Fund Flows report for H1 2023.
The exhibit below shows biannual flows for global long-term open-end funds and ETFs since January 2021.
According to the Morningstar report, global long-term mutual funds and ETFs had $54 billion of inflows in the first half of 2023, but fixed-income funds accounted for the entire intake. The category’s $236 billion inflow made up for the other groups’ outflows.
The report also found that actively managed ETFs continue to outpace passively managed ETFs in H1 2023 and that ETFs enjoyed their 113th straight month of inflows in June. Open-end funds had inflows for the month but had outflows in 16 of the previous 17 months.
Morningstar reported that indexed strategies now represent 39% of assets globally, or $16.2 trillion.
They found that, among the largest fund groups, J.P. Morgan posted the highest organic growth rate (5.6%) by far, while iShares ($66 billion) beat out Vanguard ($59 billion) in absolute terms.
The top 10 fund groups by assets are headquartered in the U.S. Many of them have succeeded in diversifying across markets, using their lower costs to scale their efforts and win over investors.
