• Active ETFs continue their hot streak, netting positive sales in 2Q22, and are well positioned for another consecutive year of inflows. On the other hand, despite experiencing strong net inflows in 2021, active mutual funds fell back into negative territory.
• From a market share perspective, AUM in active ETFs is $306 billion, up 4% since 2021, whereas active mutual funds have shrunk 20% from $17.4 trillion to $13.9 trillion during the same period.
• While ETFs have historically been associated with passive investing, more fee-efficient active management through the ETF wrapper appears increasingly sought after. The number of active ETF launches surged from 175 in 2020 to 300 in 2021, and 110+ so far in 2022. However, there are several structural aspects of the data helping to drive the trend seen above:
  • The current active ETF market strongly skews to fixed-income strategies and ultrashort fixed-income in particular. This has helped dampen sales volatility often associated with strong equity market swings and falls in line with segments of active management that have held up best against passive gains, at least to date.
  • Newer funds tend to see less outflows than their older counterparts, simply because redemptions haven’t taken hold to the same level as sales.

Active Net Flows: ETFs vs. Mutual Funds ($ B)

Source: Morningstar, FUSE Research Network