Investors step into ETFs at record rate despite the turmoil of the market

Copyright © HT Digital Streams Limit all rights reserved. Jack Pitcher, The Wall Street Journal 4 min Read May 26, 2025, 12:44 IST investors have plowed a record of $ 437 billion in the US ETFs so far this year, exposed by the wildest markets since Covid. (File Photo: Bloomberg) Summary of US exchange -traded funds has so far raised about $ 437 billion to new assets. This year’s volatile, trade war obsessive market has not shaken US investors’ penchant for exchange-traded funds. In reality, it just made them love more. Investors have plowed a $ 437 billion record in US ETFs so far this year, without the wildest markets since Covid. And if inflow retains the current rate – historically, accelerating it in the summer and autumn months – it will be the second direct record year for US ETF flow. This is partly due to the relentless flow of money from mutual funds and in ETFs, which tend to provide lower fees and certain tax benefits that their older cousins ​​cannot match. But the decading trend does not explain the boom of this year; Indeed, when the US markets became scarce, many people began to double their bets on American assets. And now, more than ever before, they have placed those bets by buying ETFs. Todd Rosenbluth, head of research at data provider Vettafi, said investors buy sales offerings as buying opportunities. The hundreds of billions of dollars that have dumped investors in ETFs have found their way to every major fund category: equity funds and bond funds. Funds that follow popular indices still sell well, but also those managed by professional stocks and bond pickers, a relatively new corner of the ETF market that gained momentum. No one has benefited more from the boom than the new champion of the ETF industry: Vanguard Group’s S&P 500 ETF. The Ultracheap Index Fund has gained a beautiful net inflow of $ 65 billion this year, while it has become the world’s largest ETF by assets. The fund is known by the Ticker symbol, and has doubled the previous annual ETF inflow record when it took $ 116 billion last year. Now it is at the pace to reset the mark by October. The rise of FET illustrates how investors have been turned broadly this year. When the stock market volatility rose to a peak of five years in April, Vanguard’s S&P 500 fund reported its highest monthly inflow ever. Many investors built up big cash ownership by that time and waited for the right moment to move money back into shares, according to Greg Davis, president and investment officer at Vanguard. “During that period of noise in early April, we saw a ratio of 5 to 1 saw-to-sale,” Davis said. “Investors have a tremendous amount of cash sitting on the sidelines and they know that if things are for sale, it’s time to make money work.” Swelling ETF assets were a windfall for Vanguard and Blackrock, the two largest US fund managers. Blackrock CEO Larry Fink has repeatedly talked about the opportunity for his firm to take advantage of a cash to shares and mortgage funds. “In the United States, there are $ 11 trillion in money market funds,” Fink said earlier this month at the Saudi-us Investment Forum in Riyadh. “If there is uncertainty, you’re going to keep more money in cash, and that’s what we’ve seen.” A few years after the Federal Reserve started interest rates to combat inflation, lure of cash is still strong for many investors. The second most popular ETF this year was a Treasury Bond Fund of Blackrock, which has nearly $ 17 billion. The cash -like fund has a 12 -month return of 4.7%. A similar offer from States Street is also in the top -10 of the Flows rankings. “We see some vulnerability on the fixed income side,” said Rosenbluth of Vettafi. “With several short-term treasury products in the top 10, this is a sign that investors are happy to wait.” Yet equity funds have taken in the majority of this year’s flow. The S&P 500 Fund of State Street, FET, FET, is at the Top 10, Vanguard’s total stock market and equity growth funds, and two Nasdaq-100 funds of Invesco. An actively managed Equity Fund of JPMorgan aimed at reducing volatility and producing the above dividend income through an options strategy also cracked the top 10 part of a broader class of active funds that some analysts called, “Boomer Candy” thanks to their popularity, the JPMorgan Building 2024. went 30% of ETF flow of this year to active funds, even if it forms less than 10% of the total assets of the industry. Greg Friedman, Fidelity’s head of ETF management and strategy, said that the long-standing huge huge fidelity in recent years is focusing on active ETF launch, and interest is still growing. “For the past 12 to 24 months we have seen a very nice inflow with most of it on the active side,” Friedman said. “It stopped even during extreme volatility.” Investors have been exchanging their mutual funds for years for the tax benefits and liquidity offered by ETFs, which increase inflows. The trend could soon accelerate even further. Dozens of fund managers have submitted applications to the Securities and Exchange Commission to offer new ETF share classes of existing mutual funds, which will enable them to offer popular strategies in the ETF hump without starting from the front. Earlier this year, Sec Commissioner Mark Uyeda told the agency’s staff to prioritize the issue, and many in the industry expect approval as soon as this year. Write to Jack Pitcher at [email protected], catch all the business news, market news, news reports and latest news updates on live currency. Download the Mint News app to get daily market updates. More Topics #etfs #Exchange Traded Funds #Wall Street Read Next Story