U.S. exchange-traded funds hit a major milestone in 2024, with assets up 28% to $10.36 trillion, driven by market appreciation and $1.12 trillion in net inflows, according to a new CFRA report.
This record year marks a shift in how investors access markets, with growth-oriented themes and active management strategies reshaping the landscape of traditionally index-dominated ETFs, according to Aniket Ullal, head of equity research. ETF at CFRA.
THE Hashdex Bitcoin Futures ETF (DEFI) led all categories with a return of 109.4% in 2024, based on CFRA data.
Technology-focused funds also performed well, with the Roundhill Magnificent Seven ETF (MAGS) returning 62.7% and the Defiance Quantum ETF (QTUM) gaining 50.4%, according to the report.
Active ETF strategies captured 24.6% of total flows in 2024, up from 14.6% in 2022, according to CFRA’s analysis.
This trend came largely at the expense of smart beta products, whose entries fell from 18.7% to 7.7% over the same period, according to the study.
Avant-garde And black rock maintained their dominance of the sector, capturing a total of 53% of all ETF inflows in 2024, according to the CFRA report.
THE Vanguard S&P 500 ETF (VOO) attracted the most new assets with $115.1 billion in inflows, followed by the iShares Core S&P 500 ETF (IVV) with $86.5 billion, the report reveals. THE iShares Bitcoin Trust (IBIT) took third place with $37.5 billion in inflows in its first year of trading.
JPMorganmeanwhile, showed growing influence in the active space, capturing 3.9% of total flows while holding just 1.6% of assets at the start of 2024, the study found.
Active ETF issuers continued to gain market share throughout 2024, the report highlights.
Dimensional Fund Advisors And Capital Group illustrates this trend, with both companies capturing more flows than their market share suggests, according to the report.
THE Global X MSCI Argentina ETF (ARGT) gained 61.6% in 2024, driven by investor optimism around Argentine President Javier Milei’s reform program, according to the study. The gaming sector also showed strength, with the VanEck Video Gaming and eSports ETF (ESPO) rounding out the top five artists.
Traditional index ETFs still retained their appeal, with annual inflows up 89% to $759.3 billion in 2024, from $402.4 billion in 2022, the data showed.
Looking ahead, CFRA projects ETF inflows between $500 billion and $1 trillion in 2025, with upside potential if the Securities and Exchange Commission approves ETFs as a mutual fund share class.
