This compares with just 3% growth in fund flows for passive ETFs, which are often a more popular option due to their low costs.
However, passive fixed income ETFs have grown to 29% of global fixed income assets – up from 8% since the end of 2008.
Indexed strategies now account for a staggering 39% of assets globally – compared to 31% at the end of 2019 – representing $16.2trn. Active ETFs in particular are becoming more popular in Asia, with the sub-category seeing a 78% growth rate in the region over the first half of 2023.
Meanwhile, Morningstar’s bi-annual report, entitled Global Fund Flows, also revealed that fixed income funds was the only category to enjoy inflows – worth $236bn – in H1 2023. $150bn of this came from the US, while $70bn was accounted for by continental Europe.
Global funds and ETFs were the most popular within their asset classes, seeing $54bn of inflows. Meanwhile, sustainable funds had more than $51bn of inflows, bringing assets in the category to $2.8trn.
Unsurprisingly, the world’s largest index funds continued to dominate flows league tables, though JPMorgan, Fidelity and PIMCO active names found themselves spread across a leading list of passive strategies.
JPMorgan’s Equity Premium Income ETF, the most successful ETF launch ever, came in 8th place, while its Large Cap Growth fund came in 4th. . Together, these strategies brought in $23bn.
The report revealed another win for the group as JPMorgan posted the highest organic growth rate (5.6%) among the largest fund groups, while iShares ($66bn) beat Vanguard ($59bn) in absolute terms.
Additionally, Morningstar’s report found American asset managers are dominating the global industry, as the top ten fund groups by assets are all headquartered in the US.
Many of them have succeeded in diversifying across markets, using their lower costs to scale their efforts and look more appealing to investors.
