The U.S. is on the way to setting a new record for ETF net inflows, with $473 billion surging into U.S.-listed ETFs through June, according to Todd Rosenbluth of investment reseach firm CFRA.

Broad market global equity and U.S. ETFs led the inflows in the first half of 2021, with iShares Core MSCI Emerging Markets ETF (IEMG) and Vanguard S&P 500 ETF (VOO) among the leaders, said Rosenbluth, who heads ETF and mutual fund research at the New York City-based firm.

“While some of the flows are driven by market enthusiasm, advisors growing comfort in using ETFs to support clients’ long-term goals helps explain the strong flows for broad market U.S. and international equity ETFs and bond ETFs,” Rosenbluth told Financial Advisor magazine.

A new record for bond ETFs could also be set, despite the fact that flows into equity ETFs dwarfed fixed-income products so far this year. On the fixed-income front, Vanguard Total Bond Market ETF (BND) has led the charge in 2021, the analyst reported.

“The S&P 500 was up 15% in the first half of the year, stronger than expected, but demand for equity and fixed-income ETFs has also been pretty consistent throughout the year, Rosenbluth said.

"While there will be an inevitable pullback in the stock market in the second half of the year, we think overall demand will remain strong as investors rotate to more defensive areas of the market, such as government bond ETFs,” he added.

The current full-year record for net ETF inflows was set in 2020, with $504 billion, “but a new milestone is likely to be set in July if not August given the current pace,” he said.

While 2020 flows were aided by fixed income and commodities, 2021 flows have been driven by record demand for equity ETFs, Rosenbluth said.

“In the first half of 2021, equity products gathered $363 billion of new money, over $100 billion more than all of 2020," he said. "Meanwhile, with an additional $106 billion, fixed-income ETFs are on pace to slightly beat 2020’s record inflows of $206 billion."

The outlier among the asset classes has been commodities, which have slight year-to-date outflows after pulling in more than $40 billion in 2020.

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