Investors are shovelling cash into exchange traded funds that invest in a handpicked array of bonds, with record inflows since January that are pushing the industry towards its first $1tn annual haul. Actively managed fixed-income ETFs took in $7bn in June and have garnered $41bn over the first half of 2024, surpassing 2023’s record of $33bn for the entire year, according to data from State Street Global Advisors, the third-largest US ETF issuer.
ETF managers also benefit from actively managed offerings because they are about three times more expensive on average than their passive counterparts, according to the Investment Company Institute. As actively managed ETFs have enjoyed record flows this year and amount for the bulk of new fund launches, actively managed mutual funds continue to leak billions of dollars month after month.