AUM, flows and more
- ETF flows totaled over $196Bn for the month, and U.S. ETF assets rose slightly to $15.8Tn.
- US large caps dominated equity flows (~$70bn). Contrary to last month, value (~$12bn) dominated growth (~-$1Bn).
- Fixed income ETFs eclipsed $50bn in flows, driven largely by Ultrashort (~$11bn) and Intermediate (~$7bn).
Active spotlight
- Flows totaled $73bn for the month. This year, more than 38% of ETF flows have gone into active strategies.
- 210 active ETFs were launched in June, a ~60% m/m increase. More than half of these were leveraged equity.
Volatility drives derivative income demand
Volatility has become the new baseline - for now. Investors have been utilizing equity derivative-income strategies with option overlays to exchange some upside potential for steadier distributions and, often, reduce realized volatility.
The momentum speaks for itself: derivative income has ranked first or second among all active ETF categories by flows in 5 out of 6 months this year. Over the last five years, the category has grown from ~$6 billion in assets to more than $180 billion and now represents nearly 20% of all equity income ETFs. In the last two years alone, issuers launched ~170 new equity derivative-income ETFs. While many are labeled “actively managed,” the underlying holdings are often passive, with the options program driving differentiation.