Global ETFs See Record High Inflows of 2,000 Trillion Won... 'All-Time High' Surpassed

$1.4 Trillion Inflows into ETFs from January to October
Led by US Equity Funds and Supported by China's Stimulus Measures
Bond ETFs Also Strong Amid Global Interest Rate Cuts Trend

Following the recent election of Donald Trump as the President of the United States, related assets have rallied, and record-breaking funds have poured into the global exchange-traded fund (ETF) market.

According to BlackRock data cited by major foreign media on the 12th (local time), net inflows into the global ETF market from January to October this year reached $1.4 trillion (approximately 1,971 trillion KRW), surpassing the previous record of $1.33 trillion set in 2021. In particular, on the 6th, the day after the U.S. presidential election, $22.2 billion flowed into U.S.-listed ETFs, marking the highest inflow recorded on the day following any U.S. election.

The largest share of money in the ETF market went to equity ETFs, which attracted $927 billion over the 10 months this year. Especially in October alone, 40% ($75.5 billion) of the $188 billion inflow into the global ETF market was invested in U.S. equity funds.

Karim Cheddid, Head of Investment Strategy for EMEA (Europe, Middle East, and Africa) at BlackRock iShares, analyzed, "Since 2022, the recovering U.S. stock market has led more capital inflows by posting double-digit returns for two consecutive years. The earnings of U.S. companies currently being announced comfortably exceed the relatively low market expectations, which is driving the flow of funds."

Last week’s announcement of a 10 trillion yuan (approximately 1,930 trillion KRW) economic stimulus package at the National People's Congress (NPC) in China is also credited with triggering a rally in emerging markets. Morningstar’s Sil Flood, Senior Product Manager, explained, "October was a record month for the flow of Chinese stocks. In just last month, $11.7 billion flowed into China equity ETFs listed outside China, more than double the previous record of $4.9 billion set in June 2022." BlackRock’s ETF investing in large-cap Chinese stocks (ticker FXI) raised $5.5 billion last month, ranking third globally, surpassing the world’s largest ETF, SPY, during the same period.

Bond ETFs also showed strength. Net inflows into global bond ETFs from January to October this year reached $376 billion, exceeding last year’s record high of $331 billion. Experts explain that with most major countries pursuing accommodative monetary policies, investors’ desire to secure bonds before interest rates fall further is driving the buying frenzy. Additionally, high-yield (high-risk, high-return) bond ETFs listed in Europe saw net inflows of $2.1 billion last month, the second-highest ever, as various regional economic data pointed to a 'Goldilocks' scenario (an ideal economic condition that is neither too hot nor too cold).

Regarding the outlook for the ETF market, there is a mixed atmosphere of optimism and caution. Cheddid, the investment strategist, drew a line under overly rosy forecasts, saying, "While ETFs are taking market share from traditional mutual funds, record inflows like those seen this year do not happen every year."

Flood, the manager, predicted that the ETF market 'super boom' like that in October this year will continue, saying, "Despite concerns that the S&P 500 returns are overly dependent on large companies, a trend of 'if you can't beat them, join them' is spreading among investors," and that the return of the business-friendly Trump will sustain this momentum.