A new Cerulli Associates study finds exchange-traded fund (ETF) assets hit an all-time high in 2023, to end the last quarter at $7.6 trillion.
The latest study, “The Cerulli Edge—U.S. Monthly Product Trends,” analyzes product trends as of November 2023, including mutual funds, ETFs, and the recent rise of separately managed accounts.
The research found that ETF assets collected $107 billion of net inflows in November—the highest number since December 2021. Active ETFs accounted for 19% of ETF inflows, to hit a total of $20 billion of inflows for the first time, reported Cerulli.
As for other investment vehicles, all mutual funds outside of commodities grew at the end of 2023, to 6.6% in Q3 for a total of $17.7 trillion. Fee-based managed accounts, both overall and specifically unified managed accounts (UMAs), also grew due to increased adoption from wealth management providers.
Managed accounts saw higher utilization among wealth managers and high-income households throughout last year, due to its customization solutions and direct ownership. Lower investment minimums, due to technology upgrades, have also drawn some wealth managers to utilize the vehicles, notes Cerulli in its study.
Vanguard research from April 2023 found that 66% of participants in defined contribution (DC) plans had a professional managed allocation at the end of 2022, up from 40% at year-end 2023. Another 2023 survey from Hearts & Wallets noted that SMAs realized the most growth over any other investment vehicle within a two-year period, from 13% in 2020 to 22% in 2022.
High utilization of managed accounts is expected to continue in 2024, as more workers turn to their employers to offer alternative investment vehicles during periods of market volatility, reports a HUB International report that highlights the top financial trends in the coming year. In its report, the firm argues that implementing such vehicles could not only help workers retire on time but drive engagement among those not saving at all.
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