Index investment strategies, such as ETFs, have reached 39% of global assets under management (AUM), although actively managed ETFs are growing much quicker than their passive counterparts.
The 39% share of global AUM for index-tracking strategies compares to 31% in 2019 and equates to $16.2 trillion of assets.
However, active ETFs have been growing faster than passive ETFs and achieved a 14% organic rate of growth in the first half of 2023, while passive ETFs grew only 3%, according to Morningstar’s Global Fund Flows report for H1 2023.
Recently, bank BBH predicted that the funds industry would see assets in the ETF sector reach $30 trillion in the next ten years, helped by greater inflows to active ETFs and by traditional asset managers entering the market.
Sustainable investments far outpaced non-sustainable inflows, according to the Morningstar report. Sustainable funds saw $51.2 billion of inflows in the first half, compared to $2.4 billion for non-sustainable or unclassified funds.
Report author, Syl Flood, said this was “despite – or perhaps because of” the backlash against sustainable investing. However, ESG inflows were mainly in Europe, with US flows printing negative.
© 2023 funds europe
