U.S. ETF inflows surpass 2020 record

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Flows to U.S. equity funds in the first seven months of this year were higher than the total for all of 2020 according to research provider Morningstar.

Ben Johnson, director of global ETF research for Morningstar and Ryan Jackson, associate research analyst for managers, said in a report that fund inflows in the year to the end of July were $ 512 billion. (433 billion euros), eclipsing the total of 500 billion dollars for 2020, despite July having the lowest monthly inflows in 2021.

ETF inflows in July were $ 54 billion, while the previous monthly low this year was $ 66 billion in May according to Morningstar. Equity ETFs accounted for three-quarters of inflows for the first seven months of this year, compared to less than half, 46%, in 2020.

“Although July flows have cooled compared to previous months, investors have maintained their belief in equity ETFs despite a richly valued market and looming economic hurdles induced by COVID-19,” Morningstar added.

Source: Morningstar.

Equity ETFs raised $ 37 billion in July, more than the $ 17 billion bond ETFs.

Morningstar said short-term bond funds continued to lead the way amid concerns about rising rates and inflation-protected bond ETFs also continued to gain momentum.

“They raked in $ 4.2 billion in July, marking their second consecutive month with more than $ 3 billion in inflows and indicating that inflation remains a top concern for many investors,” the report said.

ETF launches

Trends towards ETFs, illiquid alternatives and personalization will continue depending on The Cerulli Edge — US Monthly Product Trends, July 2021 Issue, due to the low interest rate environment, investor awareness of product costs, and technological advancements allowing for greater customization and easier linking of investors to alternative exposures.

“While only a handful of individual companies have not launched or announced the launch of ETF products, the deployment of active ETF strategies is still in its early stages,” Cerulli said. “Managers need to decide whether they want to convert their mutual funds into ETFs or launch new ETFs, which can be clones or adjustments to previous strategies. “

Nuveen said in a statement on August 5 that the manager has launched its first range of semi-transparent active ETFs. Holdings will be disclosed on a monthly basis, similar to mutual funds within the same fund family. The semi-transparent structure also allows the portfolio managers to actively manage the strategy without the risk of signaling changes in position to the market.

The asset manager said that the three semi-transparent active ETFs combine the structural advantages of ETFs and mutual funds.

Jordan Farris, Head of ETF Products at Nuveen, said in a statement: “These proven equity strategies incorporate our unique combination of stock selection, analysis and portfolio modeling expertise with structuring capabilities. of products across our $ 1.2 trillion platform. We are committed to providing clients with choice within their preferred envelope and the ability to build portfolios across our entire product line, including mutual funds, closed-end funds, and active index and ETF options. “

Cerulli pointed out that more than 200 ETFs were launched in the first half of 2021.

“ETF issuers need to do more than ever to differentiate themselves, resulting in a notable increase in the number of niche and thematic ETF launches in 2021,” Cerulli said. “These products are often rule-based strategies and have broad themes including environmental, social and governance (ESG) topics, artificial intelligence, and social media conversation.”



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