Animal Spirits Podcast Talk Your Book: Massive ETF Inflows
Dec 20, 2021
Matt Bartolini, Head of ETF Research at State Street Global Advisors, shares his insights on the soaring popularity of ETFs, including the surge of ESG options. He elaborates on the impressive trillion-dollar inflows and the rise of low-cost, sector-specific strategies. The conversation shifts to active fixed income investments, emphasizing credit selection and high-yield loans. Bartolini also discusses inflation’s role in the market, contrasting it with global trends, and the challenges faced by different sectors amid changing investor sentiments.
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Record ETF Inflows
- Global ETF inflows crossed $1 trillion for the first time ever in 2021, exceeding the previous record of $735 billion.
- Most of the money went to established firms like State Street, Vanguard, and BlackRock.
Drivers of ETF Inflows
- Record ETF inflows are driven by the ongoing shift to low-cost passive vehicles and the rise of model portfolios.
- A risk-on market environment and increased comfort with fixed income ETFs also contributed.
Active ETF Launches
- A record number of ETFs launched in 2021, mainly actively managed strategies.
- This surge is partly attributed to Cathie Wood's success and changes in listing standards.