ETF Flows Smash Full Year Record

$705 billion inflows push industry to new milestone despite market turmoil

Equity ETFs and Fixed Income ETFs shared the record-breaking demand

In 2023, global exchange-traded fund (ETF) inflows reached a record $705 billion, surpassing the previous full-year record set in 2021. This surge in ETF popularity was driven by demand for both equity ETFs and fixed income ETFs, reflecting investors' desire for diversification and risk management amid market uncertainty.

Equity ETFs, which track the performance of stock indices or sectors, attracted $400 billion in inflows, driven by strong performance in the technology, healthcare, and consumer discretionary sectors. Fixed income ETFs, which invest in bonds and other fixed income securities, saw $305 billion in inflows, as investors sought refuge from market volatility and rising interest rates.

The record-breaking ETF inflows highlight the growing importance of these investment vehicles, which offer investors a convenient and cost-effective way to gain exposure to a wide range of assets. As ETF providers continue to innovate and launch new products, this trend is expected to continue, further fueling the growth of this dynamic industry.