Now a common part of the wealth management toolbox, ETFs, which are listed and traded like stocks, continue to expand in asset sizes, also benefiting from a gain in many (but not all) equity indices during January.

Data issued this month underscored how vast the exchange-traded fund (ETF) market is today. According to ETFGI, a research house, the global ETFs sector reached a fresh milestone of $11.73 trillion at the end of January.

The global industry gathered $136.80 billion in net inflows in January – and the highest inflow on record. The second-highest inflow happened back in 2018 ($105.59 billion).  

ETFs and other “passive” entities have surged in use in recent years, with large gains before and after the 2008 financial crash as investors sought low-cost ways of tapping into rising markets, and as the case for “active” funds came under pressure. 

Rising financial markets in January this year worked alongside the rising scale of ETF assets, the authors of the ETFGI report said. 

“The S&P 500 increased by 1.68 per cent in January. Developed markets excluding the US decreased by 0.31 per cent in January,” the report said. However, the flow wasn’t all in one direction. 

“Hong Kong (down 9.80 per cent) and Korea (down 9.69 per cent) saw the largest decreases amongst the developed markets in January. Emerging markets decreased by 3.46 per cent during January. China (down 11.18 per cent) and Chile (down 9.68 per cent) saw the largest decreases amongst emerging markets in January,” it said.