ETFs are having a motherload year

The global exchange-traded fund industry is wrapping up its best year ever, with a record $1.4 trillion in inflows through late December, pushing total assets to $14 trillion, according to Matthew Bartolini, Head of SPDR Americas Research at State Street Global Advisors.

"Within active, both active equity and active fixed income, as well as active "other" strategies, have had record flows of $150 billion, $100 billion, and $20 billion, respectively," Bartolini noted. 

Along with a rise in active funds, investors clamored for the new ETFs  on the scene. 

"Another reason has to do with the launch of crypto ETFs. You've seen Spot Bitcoin ETFs now pop up in January, inflows have just been insane," Sumit Roy, senior ETF analyst for ETF.com, told Gxstocks. 

Since the January 5, 2024, launch, iShares Bitcoin Trust ETF or (IBIT) has added over $50 billion in assets, according to the firm, which makes it the best exchange-traded product in history.  

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"The inflows into IBIT since launch underscore investors’ preference to gain exposure to bitcoin through the convenience and quality of an exchange-traded product. The market has seen a renewed sense of optimism in anticipation of positive regulatory action for bitcoin and crypto. We remain focused on education for investors and providing access to bitcoin with convenience and transparency," a BlackRock spokesperson told Gxstocks in November. 

Bitcoin has advanced over 122% this year, hitting an all-time high of $106,734 and has since pulled back from those levels. The crypto industry has gotten a boost following President-elect Donald Trump's White House win and the promise of a more crypto-friendly regulatory environment. 

Trump nominated former SEC official Paul Atkins, much favored by the industry, to replace current SEC Chair Gary Gensler in January. 

Another driver, those ETFs that are considered more "tactical" letting you position for both sides of a trade. These ETFs are the top four performers of 2024, as tracked by VettaFi rising between 428% to over 178% far outpacing the S&P 500’s 26% rise through Monday. 

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"Whether somebody has an opinion that the market's going to go up or down on a short-term basis, we have those tools for them," Ed Egilinsky, managing director at Direxion, told Gxstocks. 

The firm’s Direxion Daily NVDA Bull 2X Shares has advanced over 300% this year. It helps investors capture the rise and/or fall of AI chip darling Nvidia. "The single stock, the leveraged inverse single stock, we actually just eclipsed six billion with the franchisee," he added. 

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The firm now has 13 single-stock ETFs, with likely plans to expand in 2025.