According to data from Morningstar, in the first seven months of this year, investors invested US$705 billion in exchange-traded funds (ETFs), pushing the total global ETF assets to a record high of 9.1 trillion in 2021.
The net inflow of funds this year has almost surpassed the US$736.5 billion invested by global investors in ETFs in 2020. According to relevant data, most of the funds have entered low-cost index tracking funds. Investors are very interested in large-market value and short-term bond ETFs and anti-inflation products.
Among them, the inflow of funds into U.S. ETFs reached a record 519 billion U.S. dollars, and the total assets of U.S. ETFs thus reached approximately 6.6 trillion U.S. dollars. The total amount of funds held by global ETFs is now higher than that of mutual funds that track indexes. As of June, the latter’s asset size was US$8.8 trillion. However, overall mutual funds still hold more funds, with an asset size of approximately 40.7 Trillions of dollars.
ETF is a basket of securities, and its trading is as easy as stocks. ETFs do not set a minimum investment amount like many mutual funds, and they are generally more cost-effective in terms of taxation, and their fees are also lower. The first ETF came out in 1993. After that, the success of this product was far from certain, but the enthusiasm for low-cost investment has driven the explosive growth of ETF assets in the past 10 years.