Broad and targeted equity exposure has also been in demand in 2021. In the first six months of 2021, investors piled into a wide range of equity ETFs, he said.
“Investors have also taken a more tactical approach, with sector ETFs providing U.S. equity exposure as well," he said, noting that Energy Select Sector SPDR (XLE 55) and Financial Select Sector SPDR (XLF 37) lead in this category.
The biggest shift in equities was investors focusing globally “as broad/regional global equity ETFs gathered $75 billion of new money in the first half of 2021, nearly four times last year’s $19 billion. IEMG and Vanguard FTSE Emerging Markets ETF (VWO 54) were the two most popular of these ETFs,” he said.
Some 180 new ETFs launched in the first half of 2021, and some have already crossed the $100 million in assets milestone, the firm found. Following 2020’s record-breaking asset gathering, asset managers lined up to either expand their existing lineups or join the ETF market.
“Dimensional Funds, which only began offering ETFs in 2020, converted part of their mutual fund suite into ETF wrappers in June, led by now $13 billion Dimensional US Core Equity 2 ETF (DFAC 27 NR) and $6 billion Dimensional US Targeted Value ETF (DFAT 45 NR),” Rosenbluth said.
“While flows might slow down if market volatility increases in the second half of the year, we think most investors will continue to build positions," he said. "Even with $6.5 trillion in U.S. listed ETF assets, we also expect more innovative and low-cost products to come to market in the second half of 2021 and new investors and advisors to discuss the benefits ETFs offer."