Trading Insights: Evolution of the US ETF market

Sep 17, 2024

Chris Andrew, Head of Market Structure and Regulatory Change at J.P. Morgan, opens up about the explosive growth of the US ETF market and how retail investors are shaping its future. He discusses the remarkable shift from mutual funds to specialized ETFs, highlighting that ETFs now account for 30% of trading activity. The podcast also delves into the intriguing rise of actively managed ETFs and the blend of active and passive strategies. Additionally, Andrew addresses challenges in the European market and the potential for industry reforms.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

INSIGHT

ETFs Are A Core Market Force

ETFs now account for roughly 30% of US equity trading and about $9 trillion AUM, making them a central market force.
ETF trading value (~$150bn/day) dwarfs whole regions and reshapes liquidity and market structure.

INSIGHT

Surge In ETF Creation Since The Pandemic

ETF issuance has accelerated from ~100 net new funds per year to 360, with 460 added in the last year alone.
The rapid surge in new ETFs began around the pandemic and aligns with the retail trading boom.

INSIGHT

New ETFs Grow Fast But Hold Little AUM

New ETFs are numerous but still hold a small share of AUM: 50% of instruments created in five years hold only ~9% AUM.
Most inflows still favour older, established ETFs despite rapid product creation.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

In this episode we hear from Chris Andrew, Head of Market Structure and Regulatory Change (EMEA) at J.P. Morgan. Chris discusses the evolution of ETF markets, the rapid rise in the issuance of new instruments (particularly actively managed ETFs) and the way in which retail investors are using these products. Chris is in discussion with Eloise Goulder, Head of the Data Assets & Alpha Group at J.P. Morgan.

Shownotes

Related podcasts:

Equity Concentration Risks and the Retail Investor with Chris Andrew, Head of Market Structure and Regulatory Change (EMEA) – April 2024
An Emerging European Retail Investor with Chris Andrew, Head of Market Structure and Regulatory Change (EMEA) – August 2023
Market Structure and the Decline in European Liquidity with Chris Andrew, Head of Market Structure and Regulatory Change (EMEA) – March 2023

This episode was recorded on September 12th 2024

The views expressed in this podcast may not necessarily reflect the views of J.P. Morgan Chase & Co and its affiliates (together “J.P. Morgan”), they are not the product of J.P. Morgan’s Research Department and do not constitute a recommendation, advice, or an offer or a solicitation to buy or sell any security or financial instrument. This podcast is intended for institutional and professional investors only and is not intended for retail investor use, it is provided for information purposes only. Referenced products and services in this podcast may not be suitable for you and may not be available in all jurisdictions. J.P. Morgan may make markets and trade as principal in securities and other asset classes and financial products that may have been discussed. For additional disclaimers and regulatory disclosures, please visit: www.jpmorgan.com/disclosures/salesandtradingdisclaimer. For the avoidance of doubt, opinions expressed by any external speakers are the personal views of those speakers and do not represent the views of J.P. Morgan. Copyright 2024. All rights reserved.