[Asia Economy Reporter Yujin Cho] Fueled by a booming stock market, global exchange-traded funds (ETFs) surpassed $1 trillion for the first time ever this year. The global ETF market rapidly expanded as active ETFs themed around related stocks grew amid the Bitcoin and meme investment craze. With market expansion, there are also forecasts that the asset size of active ETFs will double next year compared to this year.
On the 12th (local time), The Wall Street Journal (WSJ), citing data from financial information provider Morningstar, reported that funds flowing into global ETFs exceeded $1 trillion (as of the end of November, approximately 1,182 trillion KRW) for the first time this year.
This represents a 36% increase compared to last year's total amount ($735.7 billion). Amid the global stock market boom, funds poured in, swelling the total global ETF assets to $9.5 trillion (approximately 1,122.9 quadrillion KRW).
Experts pointed to the stock market boom and the lack of high-yield investment options as the background for the ETF craze. Rich Powers, head of ETFs and index products at Vanguard Group, said, "When stock market volatility intensifies, more investors tend to seek index-tracking products."
In particular, this year, the ETF market expansion was driven by a large influx of individual investors amid the Bitcoin and meme stock craze.
In March of this year, when the so-called meme stock craze such as the GameStop incident occurred, Turtle Capital Management launched a meme ETF that gathered popular stocks among retail investors, targeting their 'FOMO (fear of missing out)' sentiment.
As a result, the number of newly issued ETFs in the U.S. market increased from 320 last year to 380 this year.
CNN Business described this year as "a tremendous year for ETFs," adding, "Numerous Bitcoin ETFs were launched this year, and next year, new ETFs for Bitcoin as well as other cryptocurrencies such as Ethereum are expected to be introduced."
Another notable feature is the large number of thematic ETFs targeting niche markets that major asset management firms have not dominated. This year, themes such as cryptocurrencies, electric vehicles, renewable energy, and the metaverse expanded, rapidly growing active ETFs investing in related stocks.
According to market research firm FactSet, more than half of the ETFs launched this year are active ETFs.
Natixis Investment Managers, headquartered in Boston, forecasted that the asset size of active ETFs targeting niche markets will more than double next year.
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