The ETF train is well and truly streaming through the countryside, with assets rapidly accumulating for the vehicle. The ETF universe is vast and growing wider at an accelerating rate. However, What unifies ETFs are the benefits the wrapper provides investors. That may contribute to the $10 trillion-plus pace that U.S. ETF assets under management is currently on.
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Natixis Investment Managers Senior Vice President and Head of Institutional Product and ETFs Nick Elward recently addressed that $10 trillion-plus U.S. ETF AUM pace in an analysis piece.
Currently, ETF AUM sits at $8.4 trillion, following a big jump from 2022 to 2023. Remarkably, he noted that ETF AUM represents 45% of total mutual fund assets compared to just 18% in 2015.
That owes somewhat to the onset of the “ETF Rule” in 2019, allowing far more ETFs to hit the market. But it also speaks to investors flocking to ETFs for their advantages. ETFs provide significant transparency and readability, given that they operate as securities. What’s more, their creation/redemption mechanism provides significant liquidity and helps to reduce taxable events compared to mutual funds, which see much more frequent tax impacts.
Elward’s look across the ETF landscape underscores the important role that active ETFs play in driving AUM forward. Active ETF assets grew 37% in 2023 compared to just 8% for their passive counterparts, he noted. Furthermore, Elward underlined that, per research from Cerulli Associates, U.S. ETF AUM appears set to overtake mutual funds by 2038.
Natixis offers a variety of active ETFs for investors to consider. Its Natixis Gateway Quality Income ETF (GQI ), an ETF an ETF actively managed by Gateway Investment Advisers, offers a quality stock view while emphasizing current income. For investors intrigued by the growing world of ETFs, strategies like GQI present great places to start.
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