ETF industry breaks above $1T inflow record

The theme song for the exchange-traded fund industry could very well be Frank Sinatra’s “It Was a Very Good Year,” as the industry hit $1.25 trillion annually in assets through November, faster than any other time in history.

“I think, largely speaking, you look across the different asset classes – stocks, bonds, commodities, gold, of course – it’s been a very good year to own assets. Assets largely across the board have outperformed cash. So, it’s just been a positive returning environment for assets. So, I think we have seen flows come in because of the sort of risk on type of behavior, but also the positive performance on assets,” Matt Bartolini, global head of research strategists at State Street Investment Management, told FOX Business in October when the industry hit a previous milestone. 

State Street manages more than $5 trillion in assets with clients in over 60 countries. 

Last year, ETF inflows hit $1 trillion on Dec. 11, 2024. Bartolini correctly predicted the industry would top the $1 trillion mark by October 15; it hit that level a day early. Full-year totals are expected to reach $1.4 trillion, revised up from $1.3 trillion, helped in part by bonds. 

“Fixed income ETFs – those continue each year to just gain more and more in popularity. And now you have them breaking records through a full-year record just in the first nine months. And that’s just because the use cases across fixed income ETFs have expanded beyond just simple beta building blocks to now contain more active strategies that have identifiable track records,” he added. 

HAND ON FUND MANAGERS DRIVE ETF GROWTH

Bond ETFs nabbed $42 billion of inflows last month and are on pace to net a record $400 billion this year. 

Gold ETF inflows are also on fire, on pace to break annual records this year, taking in $1 billion alone in November. Even as the price of the yellow metal continues to break records, trading above $4,482.80 an ounce, as of December 23.  Inflows are already at $42 billion. 

SPDR Gold Trust ETF, the largest ETF backed by physical gold, has seen record inflows of and has gained over 68%, while the smaller SPDR Gold minishares ETF is up by the same amount. 

ETF LEADER BOARD DOMINATED BY NIMBLE FUNDS

Bartolini and others outline the traditional case for owning gold:

Gold’s Bullish Backdrop

• Persistent inflation above the Federal Reserve’s preferred 2% mandate
• Global instability
• Falling interest rates
• U.S. debt, deficits
• A weaker U.S….