Exchange-Traded Investment Funds (ETFs)

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2021: The inflow of funds to exchange-traded investment funds in the world for the first time exceeded $1 trillion

In 2021, the inflow of funds to exchange-traded investment funds in the world for the first time exceeded $1 trillion. This was reported in December 2021 by analysts Morningstar.

According to them, the bulk of the funds went to American funds managed by the Vanguard Group, Black Rock and State Street. Vanguard manager Rick Powers attributes this to an uncertain situation in the stock markets, which is why interest in index products is increasing.

We have a historical precedent: the restless financial markets, and more and more investors choose index products, - he noted.

The inflow of funds to exchange-traded investment funds in the world for the first time in a year exceeded $1 trillion

Analysts also say that funds with a good management team that specialize in narrow topics attract interest. Among them, for example, YanEck, which created a fund engaged in the food industry.

According to experts, ETFs by the end of 2021 are considered by investors and managers as a kind of building material for the formation of various castomized strategies. Funds are suitable for this much more than the direct purchase of individual securities.

Amid the boom in exchange-traded funds, investment companies are creating new narrow-topic ETFs, trying to find a niche that is not yet dominated by industry giants, The Wall Street Journal notes. For example, VanEck launched an ETF specializing in the food industry in December, and Tuttle Capital Management in March introduced the FOMO ETF, which is focused on stocks popular among private investors.

FactSet ETF Research Director Elizabeth Cashner noted that this year investment firms closed the smallest number of funds in eight years. In 2020, a record number of ETFs stopped working - 277. In the United States in 2021, a record 380 ETFs were created.^[1]

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