Displaying items by tag: ETFs

At the ETFs Summit hosted by S&P Dow Jones and the Mexican Stock Exchange, industry leaders predicted that active ETFs will continue growing rapidly, drawing market share not only from mutual funds but increasingly from structured notes. Structured notes—once prized for their customization—are losing ground as active ETFs replicate similar strategies with added liquidity, transparency, and without the counterparty risk inherent in notes. 

Retrocession fees no longer necessary, ETFs provide institutional-class access with real-time pricing, something structured notes cannot offer. While structured notes often come with hidden complexities and limited tradability, active ETFs deliver the same exposure with the ease of public market trading and daily liquidity. 

This shift is part of a larger industry trend: of 600 ETFs launched last year, 400 were actively managed, signaling innovation is now happening more through ETFs than through complex structured products. 

Finsum: As ETFs expand their reach across asset classes, including private credit and crypto, their dominance over less liquid, opaque vehicles like structured notes seems increasingly likely.

Global equity funds attracted $8.71 billion in net inflows, reversing the previous week’s $4.4 billion outflow, as risk appetite returned. Investor optimism was fueled by solid U.S. economic data, progress on trade deals with Japan and the EU, and upbeat early earnings reports, including record profits from TSMC and a forecast bump from PepsiCo. 

European equity funds led the charge with $8.79 billion in inflows, their best showing in 11 weeks, while U.S. equity outflows slowed significantly. Sector-wise, tech rebounded with $1.61 billion in inflows, while financials and industrials each brought in over $1 billion. 

Global bond funds continued their 14-week inflow streak, adding $17.94 billion, led by short-term, euro-denominated, and high-yield bond categories. Commodity funds saw a resurgence too, with gold and precious metals funds notching $1.9 billion in net inflows, their strongest showing in over a month.

Finsum: If optimism over trade deals and AI-driven earnings continues to build, we could be on the verge of a sustained equity rally that pulls even hesitant U.S. investors off the sidelines.

As expectations for interest rate cuts build, emerging market (EM) debt is drawing increasing attention from investors. Lower U.S. rates typically weaken the dollar, making EM currencies more attractive and boosting returns on dollar-denominated EM bonds. 

This favorable backdrop has already spurred strong demand, with EM bond issuance in Central and Eastern Europe, the Middle East, and Africa reaching $190 billion in the first half of 2025, on pace to break historical records. 

The Vanguard Emerging Markets Government Bond ETF (VWOB) offers investors a low-cost, diversified way to access this space, boasting a 30-day SEC yield of 5.66% and nearly 7% YTD return. As rate cut bets intensify into September, VWOB is positioned to benefit from both income and potential price appreciation. 

Finsum: For investors seeking EM exposure without the complexities of individual bond selection, ETFs offer compelling options

Gold-backed ETFs saw their biggest first-half inflow since early 2020, as investors flocked to the metal amid global trade tensions and economic uncertainty. According to the World Gold Council, physically backed gold ETFs attracted $38 billion in inflows from January to June 2025, lifting total holdings by 397.1 metric tons to 3,615.9 tons. 

This surge was largely driven by concerns over U.S. tariff policies under President Trump, prompting a shift toward safe-haven assets. U.S.-listed funds led with 206.8 tons added, while Asia-listed ETFs set a regional record with 104.3 tons—accounting for 28% of global flows despite managing just 9% of global gold ETF assets. 

The rebound follows modest inflows in 2024 and reverses a three-year trend of outflows tied to high interest rates. Spot gold prices have surged 26% this year, reaching an all-time high of $3,500 per ounce in April.

Finsum: Gold ETFs are a great way to get exposure and get an inflation hedge in case tariffs cause a spike. 

Active ETFs have officially outnumbered their passive counterparts in the U.S. for the first time, with 2,069 listed funds as of mid-June. While passive ETFs still hold the lion’s share of assets under management, investor interest is clearly shifting—active strategies have attracted nearly 40% of total ETF inflows this year. 

Many investors are turning to active ETFs for more agile, hands-on approaches in navigating today’s unpredictable markets, particularly in fixed income and equity sectors. The SEC is also weighing changes that would allow mutual funds to launch ETF share classes, a move that could dramatically expand access to active strategies and boost tax efficiency. 

However, this flexibility may come at a cost for asset managers, as ETFs typically can't turn away new investors like closed mutual funds can, potentially limiting a manager's control over fund size and strategy execution. 

Finsum: With U.S. ETF assets reaching $11 trillion in May, these structural shifts could fuel continued growth and reshape the way investors access actively managed portfolios.