• As interest in active ETFs continues to grow, conversion has emerged as a popular method for entering the space. As of year-end 2023, nearly 18% of the total active ETF market is attributed to converted funds.
• During 2023, there were a total of 36 mutual fund-to-ETF conversions, double the number of conversions in 2021. These 36 funds had $17.6 billion in AUM at the end of 2022. Following conversion, their AUM dropped to $13.8 billion as of year-end 2023.
• Overall, total flows into converted funds were positive during 2023, with net inflows of $8.7 billion. However, DFA was responsible for $9.5 billion in inflows, with a slight majority of converted funds witnessing net outflows after conversion.

Mutual Fund-to-ETF Conversions: Number and AUM, 2021-2023

Sources: FUSE, Morningstar