In 2022, the global ETF industry made $856 billion with near-record inflows

The global exchange-traded fund industry attracted $856.16 billion in net inflows in 2022, the second-highest annual net inflows ever, according to ETFGI data released Thursday.

According to London-based ETFGI, an independent research and consulting firm whose global industry data on ETF flows includes both ETFs and other exchange-traded products, last year’s net inflow was the second largest since 2021, when a record $1.29 trillion was injected into it. dollars.

Net capital inflows into the industry in 2022 came against the background of difficult financial markets. For example, the S&P 500 is down 19.4% in 2022, its worst year since 2008.

“Institutional investors, financial advisors and retail investors around the world are increasingly using ETFs,” Deborah Fuhr, managing partner, founder and owner of ETFGI, said in an email on Thursday.

ETFs are cost-effective, have a low minimum investment, and can be bought or sold throughout the day, just like stocks on an exchange, Fuhr said. They also cover various asset classes, she said.

“In the US, ETFs are more tax-efficient than mutual funds due to their unique creation and redemption process,” Ms. Fuhr said. “Retail investors can buy and sell without paying a commission.”

She added that many registered investment advisors use model portfolios that use ETFs as building blocks.

Assets invested in the global ETF industry at the end of last year were $9.23 trillion, down 10% from $10.26 trillion at the end of 2021, according to ETFGI. In December 2022, ETF/ETPs raised $69.37 billion in net inflows, marking their 43rd consecutive month of net inflows.

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